FEDERAL COURT OF AUSTRALIA
Australian Communications and Media Authority v Radio 2UE Sydney Pty Ltd (No 2) [2009] FCA 754
PECUNIARY PENALTIES –– purposes –– depending on statutory scheme can include, in addition to deterrence, punishment and retribution
COMMUNICATIONS LAW –– broadcasting services licence –– nature of licence –– rights to operate a broadcasting licence is a privilege granted under the Broadcasting Services Act 1992 (Cth) ss 3(1) and 4(1) –– licensee holds a position of public trust –– public interest considerations in the statutory scheme –– ability for broadcasting to exert influence in shaping community views –– holding licence means assuming a position of public trust –– disclosure standard a method of ensuring transparency in current affairs
COMMUNICATIONS LAW –– Broadcasting Services Act 1992 (Cth) –– ss 140A, 205F –– breaches of Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 –– famous radio personality commits contraventions –– proceedings for agreed penalty –– liability under s 140A of licence in respect of conduct by contravening “star” is direct, not vicarious, liability of the licensee –– Australian Communications Media Authority
COMMUNICATIONS LAW –– PECUNIARY PENALTIES –– Broadcasting Services Act 1992 (Cth) –– penalty range –– s 205F(3) –– Court must have regard to “all relevant matters” in fixing a penalty –– general and particular deterrence –– public interest considerations –– punishment or retribution for violating the public trust in fixing a penalty under the Act –– nature and extent of contraventions –– circumstances of the contraventions –– relevance of alternative methods of enforcement for similar/same contraventions –– criminal proceedings may be commenced after civil penalty imposed –– whether choice to bring civil penalty proceedings, rather than criminal prosecution, indicated a lighter penalty –– no answer that internal compliance review processes miscarried –– history of contravening –– relevance of respondent’s early admission of liability –– whether co-operation with prosecuting authority ameliorates penalty –– contraventions were reckless and demonstrated a contempt for the standard –– offence towards the higher end of range
Communications and Legislation Amendment (Enforcement Powers) Act 2006 (Cth)
Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000
Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 considered
Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 cited
Australian Competition and Consumer Commission v PRK Corporation Pty Ltd [2009] FCA 715 cited
Australian Competition and Consumer Commission v Qantas Airways Ltd (2008) 253 ALR 89 discussed
Cameron v The Queen (2002) 209 CLR 339 cited
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australia Competitions and Consumer Commission (2007) 162 FCR 466 cited
Director of Public Prosecutions v United Telecasters Sydney Ltd (1990) 168 CLR 594 cited
Gray v Motor Accident Commission (1998) 196 CLR 1 cited
Hamilton v Whitehead (1988) 166 CLR 121 followed/discussed
L Vogel & Sons Pty Ltd v Anderson (1968) 120 CLR 157 applied
Lamb v Cotogno (1987) 164 CLR 1 discussed
Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 cited
Lukatela v Brich (2008) 223 FLR 1 cited
Markarian v The Queen (2005) 228 CLR 357 cited
Mill v The Queen (1988) 166 CLR 59 applied
Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR ¶41-993 applied
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 followed
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 followed
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 cited
RH McL v The Queen (2000) 203 CLR 452 cited
Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 cited
Ryan v The Queen (2001) 206 CLR 267 cited
Secretary, Department of Health and Aging v Pagasa Australia Pty Ltd [2008] FCA 1545 followed
Tesco Supermarkets Ltd v Nattrass [1972] AC 153 cited
Trade Practices Commission v CSR Limited (1991) ATPR ¶41-076 applied/distinguished
Victoria v Australian Building Construction Employees’ and Builders Labourers’ Union (1982) 152 CLR 25 discussed
Weininger v The Queen (2003) 212 CLR 629 cited
Wong v The Queen (2001) 207 CLR 584 cited
AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY v RADIO 2UE SYDNEY PTY LTD
NSD 1841 of 2008
RARES J
17 July 2009
SYDNEY
| IN THE FEDERAL COURT OF AUSTRALIA |
|
| NEW SOUTH WALES DISTRICT REGISTRY | NSD 1841 of 2008 |
| general division |
|
| AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY Applicant
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| AND: | RADIO 2UE SYDNEY PTY LTD Respondent
COMMUNICATIONS LAW CENTRE Intervenor
|
| JUDGE: | |
| DATE OF ORDER: | 17 July 2009 |
| WHERE MADE: | SYDNEY |
THE COURT ORDERS THAT:
1. The respondent pay to the Commonwealth a pecuniary penalty of $10,000 in that it contravened s 140A(3) of the Broadcasting Services Act 1992 (Cth) (‘the Act’) at 11.26am on 5 October 2007 by failing to make a disclosure announcement in accordance with a condition of its commercial radio broadcasting licence set out in cl 8(1) of Schedule 2 of the Act to comply with cl 7 of the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 (‘a disclosure announcement’) that Hamilton Island Enterprises Ltd was a sponsor of John Laws at the time of an on-air mention of Hamilton Island.
2. The respondent pay to the Commonwealth a pecuniary penalty of $10,000 in that it contravened s 140A(3) of the Act at 11:40am on 5 October 2007 by failing to make a disclosure announcement that Hamilton Island Enterprises Ltd was a sponsor of John Laws at the time of an on-air mention of Hamilton Island.
3. The respondent pay to the Commonwealth a pecuniary penalty of $20,000 in that it contravened s 140A(3) of the Act at 10:06am on 18 October 2007 by failing to make a disclosure announcement that Byron Bay Beverages Pty Ltd was a sponsor of John Laws at the time of an on-air mention of Byron Bay Beer.
4. The respondent pay to the Commonwealth a pecuniary penalty of $20,000 in that it contravened s 140A(3) of the Act at 10:28am on 18 October 2007 by failing to make a disclosure announcement that Byron Bay Beverages Pty Ltd was a sponsor of John Laws at the time of an on-air mention of Byron Bay Beer.
5. The respondent pay to the Commonwealth a pecuniary penalty of $25,000 in that it contravened s 140A(3) of the Act at 11:13am on 24 October 2007 by failing to make a disclosure announcement that Toyota Motor Corporation Australia Ltd was a sponsor of John Laws at the time of an on-air mention of a Toyota Landcruiser.
6. The respondent pay to the Commonwealth a pecuniary penalty of $25,000 in that it contravened s 140A(3) of the Act at 11:14am on 24 October 2007 by failing to make a disclosure announcement that Byron Bay Beverages Pty Ltd was a sponsor of John Laws at the time of an on-air mention of Byron Bay Beer.
7. The respondent pay to the Commonwealth a pecuniary penalty of $30,000 in that it contravened s 140A(3) of the Act at 10:10am on 24 October 2007 by failing to make a disclosure announcement that Hamilton Island Enterprises Ltd was a sponsor of John Laws at the time of an on-air mention of Hamilton Island.
8. The respondent pay to the Commonwealth a pecuniary penalty of $45,000 in that it contravened s 140A(3) of the Act at 11:51am on 26 October 2007 by failing to make a disclosure announcement that Hamilton Island Enterprises Ltd was a sponsor of John Laws at the time of an on-air mention of Hamilton Island.
9. The respondent pay to the Commonwealth a pecuniary penalty of $35,000 in that it contravened s 140A(3) of the Act at 11:21am on 2 November 2007 by failing to make a disclosure announcement that Toyota Motor Corporation Australia Ltd was a sponsor of John Laws at the time of an on-air mention of Toyota.
10. The respondent pay to the Commonwealth a pecuniary penalty of $10,000 in that it contravened s 140A(3) of the Act at 9:53am on 30 November 2007 by failing to make a disclosure announcement that Roche Group Pty Ltd was a sponsor of John Laws at the time of an on-air mention of the Roche Family.
11. The respondent pay to the Commonwealth a pecuniary penalty of $35,000 in that it contravened s 140A(3) of the Act at 10:21am on 30 November 2007 by failing to make a disclosure announcement that Toyota Motor Corporation Australia Ltd was a sponsor of John Laws at the time of an on-air mention of a Toyota Hi-Lux
12. The respondent pay to the Commonwealth a pecuniary penalty of $45,000 in that it contravened s 140A(3) of the Act at 11:14am on 30 November 2007 by failing to make a disclosure announcement that Byron Bay Beverages Pty Ltd, Toyota Motor Corporation Australia Ltd, Qantas Airways Ltd and Oatley Family Wines were sponsors of John Laws at the time of on-air mentions of Bryron Bay lager, Toyota, Qantas and Wild Oats wine.
13. The respondent pay to the Commonwealth a pecuniary penalty of $50,000 in that it contravened s 140A(3) of the Act at 11:25am on 30 November 2007 by failing to make a disclosure announcement that Toyota Motor Corporation Australia Ltd was a sponsor of John Laws at the time of an on-air mention of Toyota.
THE COURT NOTES:
14. The agreement between the parties that the respondent will pay the applicant $20,000 in respect of its costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
| IN THE FEDERAL COURT OF AUSTRALIA |
|
| NEW SOUTH WALES DISTRICT REGISTRY | NSD 1841 of 2008 |
| general division |
|
| BETWEEN: | AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY Applicant
|
| AND: | RADIO 2UE SYDNEY PTY LTD Respondent
COMMUNICATIONS LAW CENTRE Intervenor
|
| JUDGE: | RARES J |
| DATE: | 17 July 2009 |
| PLACE: | SYDNEY |
REASONS FOR JUDGMENT
1 The Australian Communications and Media Authority has applied for orders that Radio 2UE Sydney Pty Ltd pay pecuniary penalties pursuant to s 205F(1) of the Broadcasting Services Act 1992 (Cth) in respect of 13 breaches of a condition in Radio 2UE’s commercial radio broadcasting licence and for declarations recording each contravention. Each breach contravened s 140A(3) of the Act and attracted liability for a civil penalty (s 140A(7)). Each contravention attracted a maximum civil penalty of 500 penalty units, a total of $55,000 (see ss 139(3), 140A(3), 205F(4)). The breaches occurred over the course of 2 months in late 2007 when the well-known broadcaster, John Laws, failed to make disclosure announcements that he was sponsored by businesses at the time and as part of the broadcasts in which his sponsors’, or their products’ or services’, names were mentioned during the course of his morning radio program, The John Laws Morning Show. I have attached a description of each contravention in a schedule to these reasons taken from the Authority’s investigation report No 2100 of October 2008. Mr Laws was paid very large sums of money by these businesses for their sponsorship.
2 The Authority had made a program standard known as the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 pursuant to s 125 of the Act. The disclosure standard commenced in January 2001. It had been made following a report of the Authority’s predecessor, the Australian Broadcasting Authority, called the “Commercial Radio Enquiry”. That had enquired into a broadcasting practice colloquially referred to as “cash for comment”. The purpose of the disclosure standard was to require commercial radio licensees to ensure that whenever one of the station’s presenters mentioned the name of a sponsor, or its products or services, the presenter made a disclosure announcement about his or her commercial relationship with the sponsor. Radio 2UE had to comply with the disclosure standard because this was a condition of its commercial radio broadcasting licence by force of cl 8(1)(b) in Sch 2 of the Act.
3 There is no doubt that Mr Laws was fully aware of who his sponsors were and how much they were paying him on the occasion of each contravention. But he did not comply with the obligations of Radio 2UE to make disclosure. The parties prepared an agreed statement of facts which I will set out shortly. They agreed that it was appropriate to suggest to the Court that a penalty of $10,000 per contravention should be imposed. That would result in a total of $130,000 in civil penalties being payable by Radio 2UE. The Authority and Radio 2UE suggested that these figures were appropriate to reflect a penalty at the lower end of the range having regard to all the circumstances, including Radio 2UE’s immediate co-operation with the Authority’s enquiry, its contrition and acceptance of responsibility for the contraventions. In addition, Radio 2UE agreed to pay $20,000 in respect of the Authority’s costs. The maximum penalties were $55,000 per contravention or a total $715,000.
4 Radio 2UE submitted that a number of matters should be seen as significant mitigating factors. It contended that, overall, its conduct warranted a conclusion that a penalty at the lower end of the range was appropriate, as the Authority had accepted. Radio 2UE relied on the evidence of Graham Mott and his conduct in support of its position. Mr Mott had been the group general manager for the Southern Cross Radio network from February 2003 to 8 November 2007 when it was taken over by Fairfax Media. Since 9 November 2007 he has been the group general manager of Fairfax Radio Network where he is responsible for managing the day to day operations of 28 radio stations and ensuring their compliance with, among others, financial and legal regulatory requirements. He has had over 40 years experience in radio broadcasting, gained largely at music and talk-back radio stations. Mr Mott was not cross-examined. I accept that he gave his evidence candidly and honestly. However, I must still weigh that evidence against the objective facts, the requirements of the Act and Radio 2UE’s licence. I also accept that Mr Mott, and through him Radio 2UE, intended that Radio 2UE would comply with the disclosure standard. But that compliance depended on its presenters’, and in particular, Mr Laws’, on-air behaviour.
5 When the matter was first listed for hearing, I was concerned that, as this was the first action for civil penalties under the Act, the relationship between the contravention and a commercial licence might involve different considerations than those in other situations permitting the imposition of civil penalties for contraventions of other legislation. Accordingly, I asked the parties to consider whether there ought be a contradictor. Both opposed that course. However, the Authority identified the Communications Law Centre as a body that might be an appropriate intervenor: see Australian Communications and Media Authority v Radio 2UE Sydney Pty Ltd [2009] FCA 214. Soon afterwards, the Centre sought to intervene. The Centre appeared by its director, Prof Michael Fraser, and he and each of the parties provided considerable assistance at the hearing.
THE STATUTORY SCHEME
6 The objects of the Act are set out in s 3(1). They include:
· the promotion of the availability to audiences throughout Australia of a diverse range of radio and television services offering entertainment, education and information (s 3(1)(a));
· the provision of a regulatory environment that will facilitate the development of a broadcasting industry in Australia that is efficient, competitive and responsive to audience needs (s 3(1)(b));
· the promotion of the availability to audiences throughout Australia of television and radio programs about matters of local significance (s 3(1)(ea));
· the encouragement of providers of commercial and community broadcasting services “… to be responsive to the need for a fair and accurate coverage of matters of public interest and for an appropriate coverage of matters of local significance” (s 3(1)(g));
· the encouragement of providers of broadcasting services “… to respect community standards in the provision of program material” (s 3(1)(h)).
7 Significantly, the Act provides in s 4(1):
“The Parliament intends that different levels of regulatory control be applied across the range of broadcasting services, data casting services and Internet services according to the degree of influence that different types of broadcasting services, data casting services and Internet services are able to exert in shaping community views in Australia.” (emphasis added)
8 The Parliament also expressed its intention that the Authority be the body charged with the duty of regulating, relevantly, broadcasting services in a manner that, in its opinion, enabled public interest considerations to be addressed in a way that did not impose unnecessary financial and administrative burdens on providers of broadcasting services (s 4(2)(a)). The Act charged the Authority with responsibility for monitoring the broadcasting industry (s 5(1)(a)). The Act conferred on the Authority a range of functions and powers to be used in a manner that, in its opinion, would produce regulatory arrangements that were stable and predictable and would deal effectively with breaches of the rules established by the Act (s 5(1)(b)). And, in s 5(2) the Act provided that where it was necessary for the Authority to use any of the powers conferred on it by the Act to deal with a breach of the Act or regulations:
“… the Parliament intends that the ACMA use its powers or a combination of its powers, in a manner that, in the opinion of the ACMA, is commensurate with the seriousness of the breach concerned.”
9 Radio 2UE held a public licence granted under the Act, namely, a commercial radio broadcasting licence. The licence was subject to a condition that the licensee comply with program standards applicable to the licence under Pt 9 of the Act (Sch 2, cl 8(1)(b)). Subclause 8(1)(b) of Schedule 2 provided:
“8 Standard Conditions of Commercial Radio Broadcasting Licences
(1) Each commercial radio broadcasting licence is subject to the following conditions:
…
(b) the licensee will comply with program standards applicable to the licensee under Pt 9 of this Act.”
10 The disclosure standard was a program standard made applicable under Pt 9. Relevantly, s 139(3) of the Act provided that a commercial radio licensee that engaged in conduct that breached a condition of cl 8(1)(b) of Sch 2 was guilty of an offence and liable to a penalty of 500 penalty units.
THE 2006 AMENDMENTS
11 In 2006 the Communications and Legislation Amendment (Enforcement Powers) Act 2006 (Cth) was enacted. It inserted s 140A into the Act. That expanded the powers of the Authority to deal with breaches of licences by arming it with powers to bring civil proceedings to recover a civil penalty. Thus, s 140A(3) provided:
“(3) A commercial radio broadcasting licensee must not breach a condition of the licence set out in sub cl 8(1) of Schedule 2.”
12 The 2006 amendments also inserted s 205F. That provided that if the Federal Court is satisfied that a person has contravened a civil penalty provision, it may order the person to pay the Commonwealth a pecuniary penalty, known as a “civil penalty order” (s 205F(1) and (2)). Relevantly, s 205F(3) provides:
"In determining the pecuniary penalty, the Federal Court must have regard to all relevant matters, including:
(a) the nature and extent of the contravention; and
(b) the nature and extent of any loss or damage suffered as a result of the contravention; and
(c) the circumstances in which the contravention took place; and
(d) whether the person has previously been found by a court in proceedings under this Act to have engaged in any similar conduct."
13 The maximum pecuniary penalty payable in respect of a contravention of a civil penalty provision cannot exceed the maximum fine that could have been imposed had the person been convicted of an offence against the provision of the Act that corresponds to the civil penalty provision (s 205F(4)). A pecuniary penalty is a civil debt payable to the Commonwealth which it is entitled to enforce as a judgment debt (s 205F(8)). Only the Authority may apply for a civil penalty order (s 205G(1)).
14 The Authority also obtained the power to accept an enforceable undertaking. This is a written undertaking given by a person, among other things, to take specified action in order to comply with the Act (s 205W(1)(a)). Such an undertaking is enforceable under s 205X. The Authority may apply to this Court for, among others, orders requiring the person to comply with the undertaking, directing the person to pay to the Authority, on behalf of the Commonwealth, a sum up to the amount of any financial benefit reasonably attributable to the breach that the person obtained directly or indirectly and compensation (s 205X(2)).
15 The explanatory memorandum circulated by the Minister for Communications, Information Technology and the Arts in support of the Bill that became the 2006 amending Act explained the purpose of introducing the civil penalty and enforceable undertaking regime. This was to complement the use of enforceable undertakings by providing further mid-range enforcement options for the Authority and industry to consider in the event that a breach had been committed. One express purpose considered in the explanatory memorandum was a perceived deficiency in the Authority’s enforcement powers. The explanatory memorandum said:
“For example, the experience of the ACMA in its attempt to prosecute the licensee of commercial radio service 2UE for multiple breaches of the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 indicates some of the difficulties confronted by the ACMA because of its limited enforcement powers.”
16 The 2006 amendments were intended to address the then lack of middle range penalties to deal with breaches of the Act, regulations and licences by adding to the Act the civil penalty and enforceable undertaking provisions. Such breaches were ones that did not warrant criminal sanctions, suspension or cancellation of a licence (see EM pars 14, 16). The explanatory memorandum referred to difficulties associated with criminal sanctions that had been highlighted following the Authority’s findings in December 2003 that Radio 2UE had committed 19 breaches of the disclosure standard. However, later, the Director of Public Prosecutions advised the Authority that on the evidence available there would be no reasonable prospect of a conviction of Radio 2UE in relation to those breaches. These breaches also involved Mr Laws.
17 The explanatory memorandum observed that suspension or cancellation of a licence was a severe penalty that affected consumers of the service as well as the broadcaster who could be expected to suffer significant economic loss as a consequence. It noted that the Authority had never used this power in respect of breaches by commercial broadcasters.
THE DISCLOSURE STANDARD
18 The object of the disclosure standard was stated in cl 3 as being:
”… to encourage commercial radio broadcasting licensees to be responsive to the need for a fair and accurate coverage of matters of public interest by requiring the disclosure of commercial agreements that have the potential to affect the content of current affairs programs.”
19 The disclosure standard applied to all commercial radio broadcasting licensees who broadcast current affairs programs (cl 4). The standard required, relevantly:
· on-air disclosure, during current affair programs, of commercial agreements between sponsors and presenters that had the potential to affect the content of those programs (cl 5(a));
· licensees to keep a register of commercial agreements between sponsors and presenters of current affairs programs and to make it available to the Authority and the public (cl 5(c));
· licensees to ensure that a condition of employment of presenters of current affairs programs is that they comply with relevant obligations imposed by, among other requirements, the standard (cl 5(d)).
20 The disclosure standard defined a “current affairs program” as a program that had a substantial purpose of providing interviews, analysis, commentary or discussion, including open line discussion with listeners, about current social, economic or political issues (cl 6). Thus, the standard applied to “talk back radio”, where the presenter and callers speak on-air about current topics. Additionally, the standard provided that a “commercial agreement” meant an agreement, arrangement or understanding:
· one of the purposes of which was that a presenter in exchange for any benefit or valuable consideration;
- promoted a third party or its products, or services or interests;
- refrained from making negative comments about a sponsor; or
- provided consultancy services in respect of publicity, promotion or public relations; or
· which imposed obligations on a presenter to provide services in consideration of which the presenter or some service company, other than the licensee, would receive more than $25,000 p.a..
The standard defined “sponsor” to mean a party to a commercial agreement (other than a presenter) as well as the party or parties who were directly to benefit from the promotion or other services provided by the presenter.
21 For the purpose of these proceedings a critical obligation was contained in cl 7(1). That provided relevantly that:
“(1) … a licensee must cause to be broadcast during a current affairs program a disclosure announcement at the time of and as part of:
(a) a broadcast of any material in which the name, products or services of a sponsor are mentioned.”
The disclosure announcement had to include at least one of the six phrases set out in cl 7(3), such as “[the name of the sponsor] … is a sponsor of mine”.
22 A licensee had to keep a register of current commercial agreements between sponsors and presenters of current affairs programs (cl 9(1)). That register had to be available free of charge for public inspection and published on the licensee’s website (cl 9(2) and (3)). The register had to identify details of each commercial arrangement, including specifying the value or benefit to be provided under it as either falling within one of three bands, $10,000 or less p.a., more than $10,000 but not more than a $100,000 p.a. or more than $100,000 p.a. (cl 10(5)). Presenters had to disclose all commercial agreements to their licensee employer (cl 12). And, cl 13 provided that a licensee had to require each presenter to comply with relevant obligations imposed on the licensee by, among other things, the disclosure standard.
23 The disclosure standard contemplated that a presenter would be able to earn remuneration directly from a third party. Generally such a third party would be a person who could have advertised on the presenter’s employer’s radio station. The licensee might lose the benefit of advertising revenue while the presenter used its licence to earn remuneration for himself or herself from the sponsor without accounting to his or her employer. Moreover, unless the commercial agreement were disclosed on-air, listeners may not appreciate the true context for the presenter’s reference to his or her sponsor or their product or service, including any apparently favourable treatment.
24 The disclosure standard was intended to provide for transparency in broadcasting. One important purpose was to enable a listener to judge whether a presenter’s reference to one of his or her sponsors was his or her genuine opinion, or simply something that he or she was being paid to say as if it were their genuine opinion. It is patent how such a practice could mislead listeners into believing that the references made to sponsors, their products or services or opinions expressed by a presenter, instead of being an advertisement or potentially an advertisement, were the presenter’s opinion. Thus, when a person telephones a talk back radio presenter of a current affairs program and discusses a particular product or service, mentioning a sponsor’s name, unless the presenter disclosed that he or she was being sponsored by that entity, the public discussion which would occur between the presenter and the caller would not be transparent. After all, the presenter could select or pre-arrange for a caller who would mention the sponsor, product or service as part of the presenter’s commercial arrangement with the sponsor.
25 The chairman of the Authority, Chris Chapman, explained its reasons for commencing these proceedings in a media release. Radio 2UE relied on the media release, its dissemination and its terms as evidence of harm to Radio 2UE’s reputation in respect of compliance and of its public denunciation in respect of the 13 contraventions (cf Ryan v The Queen (2001) 206 CLR 267 at 284-286 [52]-[59] per McHugh J, 303-304 [123] per Kirby J, 318-319 [177] per Callinan J). Mr Chapman said:
“ACMA has taken the step of applying for civil penalty orders against 2UE, having earlier tried to address 2UE’s compliance failures through other means. These latest breaches occurred at a time when 2UE had given ACMA an enforceable undertaking to improve its performance, particularly in relation to the John Laws Morning Show....
However, ACMA —and the Australian Broadcasting Authority before it— has emphasised in previous findings against 2UE that the obligation to comply with program standards lies with the licensee itself; in fact it goes to the heart of a licensee’s obligations.
Broadcasting licences are not given out lightly by government and convey significant benefit to those to whom a licence is granted. It is a licensee’s unrelenting responsibility to manage its business, including its presenters and production staff, so as to ensure satisfactory compliance with the regulatory requirements.
Company management put at real risk the retention of these licences when they allow on-air personalities or other staff to breach the rules. One consideration informing the Authority’s agreement to consenting to the civil penalty order was its assessment that Fairfax genuinely accepts that proposition.” (emphasis added)
THE PURPOSE AND SCOPE OF SS 140A AND 205F
26 The grant of the licence is a privilege to use the public resource of the radio spectrum. Abuse of the privilege, by breaching a condition of a licence, attracts liability under ss 139(3) and 140A(3). The primary purpose of s 140A(3) is to protect the public by holding licensees to the standard of conduct that their licence requires them to observe. The disclosure standard addresses a particular, and insidious, means of abusing the privilege of a commercial radio broadcasting licence. That standard recognised the significant degree of influence current affairs presenters could exert in shaping community views in Australia (see s 4(1)). The more prominent the presenter, the greater the potential he or she has to exert influence in shaping community views.
27 The spoken word is the vehicle used to shape views on radio current affairs programs. The identity of the speaker, if known to the audience, can itself influence their receptivity to what he or she says; as can the speaker’s oratorical style and manner of delivery. And, because of its orality, publication in a radio broadcast conveys a transient message. The listener may tune in or turn on the radio part way through a program; he or she may have missed an earlier disclosure announcement by the presenter when he or she returns to a topic that attracts an obligation to make such an announcement. If it is not made, that new listener will not be aware of what the disclosure standard, and the licence, require be conveyed contemporaneously, namely the presenter’s sponsorship. Additionally, listeners may not always be attentive to what is being broadcast on radio and may miss the significance, or indeed the occurrence, of an earlier disclosure statement in the same program. That can affect the meaning which the listener understands to have been conveyed by what he or she hears the presenter saying later. These characteristics of transient communications, such as radio or television broadcasts, are also recognised in the common law principles of defamation: Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 165G-166E per Hunt CJ at CL, Mason P and Handley JA agreeing.
28 Thus, the transience both of what is spoken on-air during a radio broadcast and of the listening audience (who may tune in or out at any time and, when tuned in, may pay closer or lesser degrees of attention) underlie the policy behind the disclosure standard’s insistence on the presenter making a disclosure announcement contemporaneously each time one of his or her sponsor’s name, products or service is mentioned.
29 The liability in s 140A(3) corresponds to, but is distinct from the criminal liability imposed by s 139(3). The conduct proscribed by each section is the same, namely a breach of a condition of a licence set out in cl 8(1) of Sch 2, including a breach of the disclosure standard. But the objects of the two sections are not the same. One object of s 140A(3) is to create a civil, not criminal, liability so as to enable the Authority to secure compliance with important provisions in the Act more readily than through criminal proceedings. But another object of the section is to reinforce the norm of conduct for licensees in s 139(3) and to provide a means to enforce their compliance with it less drastic than the remedies existing before 2006.
30 The Parliament provided that the civil penalty could match the criminal penalty for the same conduct of a commercial radio broadcasting licensee in breaching a condition of its licence. However, the imposition of a civil penalty under s 140A(3) would not carry the stigma attached to a criminal conviction under s 139(3). And, pursuant to s 205K of the Act the civil penalty could be imposed after a trial using the civil onus of proof (see too s 140 of the Evidence Act 1995 (Cth)): see too Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 at 477-482 [19]-[38] per Weinberg, Bennett and Rares JJ.
31 A primary purpose of civil penalties is deterrence: Trade Practices Commission v CSR Limited (1991) ATPR ¶41-076 at 52,152 per French J. Hence, in assessing the penalty to be imposed, a court will consider whether, in all the circumstances relevant to be taken into account (here under s 205F(3)), others would be deterred by the penalty and at the same time the licensee will be penalised or punished appropriately. The range of relevant matters under s 205F(3) ordinarily will include (borrowing from what French J suggested in CSR (1991) ATPR ¶41-076 at 52,152-52,153):
· the deliberateness of the contravention;
· whether the contravention occurred or arose out of the conduct of senior management or at a lower level;
· whether the licensee has a corporate culture conducive to compliance with the Act and standards as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention;
· whether the licensee has shown a disposition to co-operate with the Authority in discharge of its regulatory role under the Act.
32 The parties urged that no difference in approach to fixing an agreed civil penalty was called for under the Act as compared to the approach taken under legislation such as under s 76 of the Trade Practices Act 1974 (Cth) and s 42Y of the Therapeutic Goods Act 1989 (Cth). They relied on what Flick J had said in Secretary, Department of Health and Aging v Pagasa Australia Pty Ltd [2008] FCA 1545 at [17], [23]-[25]. He helpfully reviewed a large number of cases imposing civil penalties arising under a number of Acts: Pagasa [2008] FCA 1545 at [23]-[27], concluding at [27]:
“Although the form of words set forth in other legislative provisions may be the same or comparable to those employed in the 1989 Act, the legislative mandate that the Court “must have regard to all relevant matters” in s 42Y(3) assumes obvious importance. It is that mandate which directs attention to those more specific matters which can only be discerned from an analysis of the 1989 Act itself. Of central importance in identifying those matters which are “relevant” — and which must therefore be taken into account — are the objects and purposes of the 1989 Act.”
33 I agree with Flick J’s approach to the construction of provisions like s 205F(3) of the Act. French J remarked in CSR (1991) ATPR ¶41-076 at 52,152 the other general objects of the criminal law apart from deterrence, namely retribution and rehabilitation, had no “… part to play in economic regulation of the kind contemplated by Pt IV” of the Trade Practices Act.
34 However, I am of opinion that other considerations arise under the Broadcasting Services Act. The purpose of regulation under the Act, including the imposition of civil penalties for contraventions of s 140A(3) under s 205F, must be gleaned from the detail of the provisions of the Act.
35 The common law recognises that its remedy of damages for tort includes, in addition to deterrence, punishment and condemnation of both the actual wrongdoer’s behaviour and the behaviour of another for whose conduct the defendant is answerable. Those objects are, therefore, not exclusively a function of the criminal law.
36 In Lamb v Cotogno (1987) 164 CLR 1 at 8 per Mason CJ, Brennan, Deane, Dawson and Gaudron JJ cited with approval Pratt LCJ’s explanation in Wilkes v Wood (1763) Lofft 1 at 19 [98 ER 489 at 498-499] that exemplary damages are awarded “as a punishment to the guilty, to deter from any such proceeding for the future and as a proof of the detestation of the jury to the action itself”. The Court held in Lamb 164 CLR at 8-11 that the objects of an award of exemplary or punitive damages include:
· punishment of a defendant;
· deterrence of that defendant and others; and
· marking the Court’s condemnation of the defendant’s behaviour.
37 The fact that a defendant who is covered by compulsory third party motor vehicle insurance and so will not pay the sum awarded as exemplary damages from his, her or its own pocket, or that the defendant is the insurer, does not restrict the power of the court to award exemplary damages: Lamb 164 CLR at 11; Gray v Motor Accident Commission (1998) 196 CLR 1 at 12-13 [32]-[36] per Gleeson CJ, McHugh, Gummow and Hayne JJ, 29 [87] per Kirby J, 50 [141] per Callinan J.
38 And, in New South Wales v Ibbett (2006) 229 CLR 638 at 648 [38] Gleeson CJ, Gummow, Kirby, Heydon and Crennan JJ observed:
“The common law fixes by various means a line between the interests of the individual in personal freedom of action and the interests of the State in the maintenance of a legally ordered society.”
39 When the Parliament adopted the well recognised device of a civil penalty as a remedy for contraventions of the Act, it did not exclude, expressly or by necessary implication, the Court from having regard to objects that are not exclusively criminal such as punishment or condemnation, in addition to deterrence: see too CEPU 162 FCR at 477-479 [19]-[28]. In Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at 146 [35] Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said that classification of proceedings as protective or penal wrongly assumed that those two objects were mutually exclusive. They held that a law may bear several characters, as may proceedings that seek relief which, if granted, would protect the public and penalise the defendant.
40 Talk back radio and current affairs programs of the kind that Mr Laws had, occupy a significant place in commercial radio broadcasting. Presenters of such programs can exert considerable influence in shaping community views.
41 In Victoria v Australian Building Construction Employees’ and Builders Labourers’ Union (1982) 152 CLR 25 at 98 as Mason J spoke of “… the overriding importance of freedom of discussion and speech”, adding “without information, there can be no meaningful discussion”: see too Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 139-140 per Mason CJ. It is now established that each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia. The duty to disseminate such information is the correlative of the interest in receiving it: Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 571 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ. The media fulfil a vital role in the ability of the Australian community and, in particular, electors to engage in the discussion of government and political matters, and ss 3 and 4(1) of the Act, in part, recognise this.
42 The disclosure standard was a key instrument to ensure transparency in current affairs radio broadcasting. Failures to disclose could violate the public’s ability to trust in the quality and nature of information conveyed in programs such as Mr Laws’. Unlike the regulation of economic behaviours provided in Pt IV of the Trade Practices Act, the Act creates the right to hold a licence but regulates the licensee’s exploitation of that right for its own benefit, by imposing limitations crafted in, and to secure, the public interest. A commercial radio broadcasting licence confers an economic privilege on a licensee exercisable in accordance with the Act, standards and the conditions of the licence. These important and distinct features of the Act were recognised in the extracts I have quoted from Mr Chapman’s media release.
43 For these reasons, I am of opinion that it is relevant to include, in the amount of a pecuniary penalty fixed under s 205F, in an appropriate case, some element of punishment of or retribution against, or stigmatisation of, a licensee which, in the course of conducting its business using the licence for its own profit, contravenes an important condition of the licence or the Act. The contravention of s 140A(3) by a failure to comply with the disclosure standard can amount to a violation of the public trust reposed in a licensee. As Mr Chapman tellingly said, the obligation to comply with that standard “… goes to the heart of the licensee’s obligations”.
44 Just as there is no single, correct sentence, so too there is no single, correct amount of a pecuniary penalty: cp Markarian v The Queen (2005) 228 CLR 357 at 371 [27] per Gleeson CJ, Gummow, Hayne and Callinan JJ. In arriving at an appropriate penalty, a court must give careful attention to the maximum provided for in the Act. The maximum invites comparison between the worst possible case and the case before the Court. And the maximum can provide a yardstick when balanced with the other relevant factors: Markarian 228 CLR at 372 [30]-[31].
45 In this respect, ordinarily the worst possible case for a civil penalty would not be equivalent to the worst possible case for a criminal penalty under the corresponding section in the Act. That is because, first, the purpose of the Parliament providing for the civil penalty was to enable the Authority to use that power to address conduct not warranting the use of the corresponding criminal provision or the suspension or cancellation of a licence. Secondly, if a person has been convicted of an offence (e.g. under s 139(3)) constituted by substantially the same conduct as attracts a civil penalty (e.g. under s 140A(3)) then s 205L prohibits the Court making a civil penalty order against that person. And, s 205M stays civil penalty proceedings if criminal proceedings have been or are later commenced in respect of substantially the same conduct. If the person is convicted, then s 205M(2) provides for the civil penalty proceedings to be dismissed, but the stay is lifted if the person is acquitted. Conversely, s 205N authorises criminal proceedings to be commenced in the opposite situation; i.e. after a civil penalty order has been made. This preserves the option of later prosecution where, for example further evidence has come to light showing that a more severe penalty is called for than that in the civil penalty order.
46 There is a prosecutorial discretion to bring criminal proceedings under s 205N. Ordinarily, some enlivening factor must arise after the conclusion of the civil penalty order proceedings to warrant the initiation of the criminal proceedings so that they would not be seen as an abuse of process in light of the policy in ss 205L and 205M (e.g. if facts subsequently were discovered, casting a different light on an apparently middle range contravention for which a civil penalty was appropriate, prosecution might be warranted).
47 Where ss 205L or 205M apply, the apparent intention of the Parliament, was to exclude the use of the civil penalty order if criminal proceedings result in conviction. This is because the stamp or, possibility, of the conviction has characterised the contravention (even if only temporarily so, pending the determination of the criminal proceedings) as of a more serious kind. No doubt the civil penalty imposed would be relevant to the criminal penalty following conviction, where s 205N applies. But, s 205N must be read harmoniously with the legislative policy reflected in ss 205L and 205M: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[71] per McHugh, Gummow, Kirby and Hayne JJ.
PRINCIPLES WHERE PARTIES AGREE THE APPROPRIATE PENALTY
48 The Parliament conferred power on the Court to impose and to determine the amount of any pecuniary penalty: s 205F(1), (3). For many years the Court has recognised the ability of parties to such proceedings to make a joint or agreed submission as to the civil penalties to be imposed for contraventions of legislation. Agreement as to the suggested result can be reached prior to the institution of the proceedings for civil penalties, as happened here. Ordinarily, there will be savings in time and public and private expense that can be expected from parties putting forward, in a responsible manner (as they have in these proceedings) agreed contraventions and suggested penalties.
49 The Court may reject the suggested penalty, and impose a different one. But, in the ordinary case the use of this sensible approach will result in a speedy determination of the proceedings. Such a consequence is obviously of considerable benefit to the community; a lengthy and expensive trial and possibly an appeal or appeals are averted and a just penalty is imposed. But there is another, very important benefit in the approach; it gives the wrongdoer a degree of certainty and a speedy imposition of the penalty. Where a result is uncertain, such as the outcome of a contested trial and the consequent penalty (whether a criminal sentence or the imposition of a civil penalty), it is all too human for a wrongdoer to procrastinate in the hope that something will work out favourably. But if a wrongdoer (such as a person who contravenes a civil penalty provision in legislation) can have relative assurance that, however severe, an agreed penalty is likely to be imposed promptly, that degree of certainty is a powerful spur to action.
50 Ordinarily, the views of the Authority will be of significant weight in assisting the Court to fix an appropriate pecuniary penalty for a contravention of s 140A(3) of the Act. The Authority’s functions and role under the Act enable it to offer insight into the circumstances and impact of the contravention and the measures taken or proposed to guard against similar conduct in the future. And, one purpose of enacting the civil penalty provisions was to give the Authority access to a greater range of enforcement measures. Thus, its choice of remedy and the manner in which it ought be imposed are important factors to weigh in assessing the appropriateness of its suggested pecuniary penalties: cp NW Frozen Foods Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 290G-291C, where Burchett and Kiefel JJ said:
“Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount.
There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case.”
51 Their Honours emphasised that the Court in such cases recognised that the selection of a penalty is not an exact science and that, as in the formation of other discretionary judgments, there will usually be a range of penalties that could be appropriate. Generally, the Court does not undertake the exercise of fixing a penalty itself to assess whether it is prepared to give effect to the parties’ suggestion: NW Foods 71 FCR at 291B-G.
52 The assessment of a pecuniary penalty that is appropriate, having regard to all relevant factors under s 205F(3) is, like a criminal sentence, the result of the “process of instinctive synthesis” described in Markarian 228 CLR at 373-374 [36]-[37] and Wong v The Queen (2001) 207 CLR 584 at 611-612 [74]-[76] per Gaudron, Gummow and Hayne. If what is suggested by the parties as an appropriate penalty is unreasonable or plainly unjust, the court can reject it on similar principles to those used when sentences are either manifestly excessive or inadequate: cf Markarian 228 CLR at 370-371 [25]; Lukatela v Birch (2008) 223 FLR 1 at 7 [25]-[26]. In Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR ¶41-993 at 48,632 [77] Branson, Sackville and Gyles JJ said:
“Just as the criminal court will take into account the prosecution’s views on the appropriate sentence, so the court in the civil penalty case, as NW Frozen Foods explained, will take account of the regulator’s position. But in neither case is the court relieved from the responsibility of exercising its own judgment as to the appropriate sentence (in criminal cases), or whether the proposed penalty is within the appropriate range for the contravention (in civil penalty cases). In each case, the Court should be satisfied that it is being given accurate, reliable and complete information on critical questions.”
53 Their Honours had emphasised earlier in their reasons that in civil penalty proceedings the view of the regulator, as a specialist body, is a relevant but not determative consideration on the question of penalty, adding (Mobil (2004) ATPR ¶41-999 at 48,626 [51(iv)]):
“In particular, the views of the regulator on matters within its expertise (such as the ACCC’s views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more “subjective” matters.”
54 In Australian Competition and Consumer Commissioner v Qantas Airways Ltd (2008) 253 ALR 89 at 107-108 [25]-[27] Lindgren J identified 11 propositions relating to the fixing of penalties under the Trade Practices Act as flowing from the decisions in NW Foods 71 FCR 285 and Mobil (2004) ATPR ¶41-993 (and these were recently applied by Jacobson J in Australian Competition and Consumer Commission v PRK Corporation Pty Ltd [2009] FCA 715at [20]-[24]). These included the propositions that:
· the Court is not obliged to commence its reasoning with the level of the agreed penalty and limit itself to considering whether that penalty is within the range; the Court is entitled to address the question independently at the outset of its reasoning;
· the admissions and agreed facts should not be approached as if they had been “tailored or modified to reflect the difficulties faced by the [regulator] in proving its case”;
· the regulator should always explain to the Court the process of reasoning said to justify a discounted penalty.
THE STATEMENT OF AGREED FACTS
55 The statement of agreed facts dated 13 February 2009 tendered by the parties was as follows:
“The parties agree to the following facts:
1. The Applicant, the Australian Communications and Media Authority (ACMA), brings these proceedings under s 205F(1) of the Broadcasting Services Act 1992 (Cth) (Act) on behalf of the Commonwealth.
2. At all material times, the Respondent, Radio 2UE Sydney Pty Ltd (2UE) was the holder of the commercial radio broadcasting licence numbered SL4102. 2UE has held this licence since circa 1940. It was last renewed on 23 August 2006 pursuant to s 47 of the Act.
3. 2UE's licence is subject to the conditions set out at Pts 2 and 4 of Sch 2 to the Act (see also ss 42(2) and 43 of the Act). Relevantly, Pt 4 of Sch 2 to the Act (which contains only one clause - cl 8) specifies the standard conditions of commercial radio broadcasting licences. It relevantly provides:
8 Standard conditions of commercial radio broadcasting licences
(1) Each commercial radio broadcasting licence is subject to the following conditions:
…
(b) the licensee will comply with program standards applicable to the licence under Part 9 of this Act;
…
The Disclosure Standard
4. Following the findings published by ACMA's predecessor, the Australian Broadcasting Authority (ABA) in the Commercial Radio Inquiry in August 2000, on 21 November 2000 a program standard was made known as the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 (Cth) (Disclosure Standard). It was made pursuant to Pt 9, s 125 of the Act. It commenced operation on 15 January 2001. It remains in force.
5. The Disclosure Standard relevantly provides that a licensee must cause to be broadcast during a current affairs program a disclosure announcement at the time of and as part of a broadcast of any material in which the name, products or services of a sponsor are mentioned. Each of the emphasised terms are defined by cl 6 of the Disclosure Standard.
6. At all material times:
6.1. "commercial agreements" (as defined by the Disclosure Standard) existed between John Laws and the following entities:
• Balmoral Australia Pty Limited (holding company of Hamilton Island Enterprises Limited and Oatley Family Wines Pty Limited);
• Byron Bay Beverages Pty Ltd;
• Toyota Motor Corporation Australia Ltd;
• Roche Group Pty Ltd; and
• Qantas Airways Ltd.
6.2. the entities named in paragraph 6.1 (including each of Hamilton Island Enterprises Limited and Oatley Family Wines Pty Limited ) were "sponsors" (as defined in the Disclosure Standard) of John Laws;
6.3. John Laws was a "presenter" (as defined by the Disclosure Standard); and
6.4. the John Laws Morning Show (Show) was a "current affairs program" (as defined by the Disclosure Standard).
7. On 30 November 2007, the Show ceased to be broadcast on 2UE and John Laws retired and ceased to be an on-air presenter for 2UE.
The Enforceable Undertakings
8. On 31 August 2006, 2UE’s ultimate holding company, Southern Cross Broadcasting (Australia) Limited reported suspected breaches of the Disclosure Standard to ACMA which allegedly occurred on the Show.
9. On 12 October 2006, ACMA commenced an investigation into 2UE's compliance with the Disclosure Standard and other programming standards.
10. On 25 September 2007, ACMA published a report of its findings from the investigation (2007 Report) that ACMA had undertaken. In that investigation ACMA found two (2) breaches of the Disclosure Standard by 2UE during a broadcast of the Show on 28 August 2006. One (1) of those breaches of the Disclosure Standard involved a failure by 2UE to cause a "disclosure announcement" to be broadcast during the Show at the time of and as part of a broadcast of material in which the name, products or services of a sponsor of John Laws were mentioned.
11. After these findings were made 2UE offered ACMA an enforceable undertaking pursuant to s 205W of the Act, which ACMA accepted on 24 September 2007 (Enforceable Undertaking). 2UE undertook to do certain things in relation to its compliance with the Disclosure Standard, including:
11.1. to implement an effective administrative system for monitoring each broadcast of the Show to ensure compliance with cl 7 of the Disclosure Standard. This is to include a mechanism to ensure that, in the event that a disclosure announcement (of the kind described in cl 7(3) of the Disclosure Standard) is not made, 2UE will:
11.1.1. take action to cause such a disclosure announcement to be made at the earliest opportunity in that program; and
11.1.2. report to ACMA in writing within 72 hours of such failure to comply with the Disclosure Standard providing details of the non-compliance and the action taken;
11.2. to appoint an independent person to review at least four programs per fortnight of the Show, who will also prepare a report on compliance with cl 7 of the Disclosure Standard to ACMA within 14 days of each fortnight; and
11.3. to provide ACMA with five half-yearly reports in accordance with a timetable set out in the Enforceable Undertaking, indicating what action 2UE has taken in the period covered to ensure that ACMA is notified as required by cl 11 of the Disclosure Standard of any additional commercial agreements or variations to commercial agreements, entered into by 2UE’s presenters or their associates.
The Compliance Assessment Report
12. Between December 2007 and October 2008, ACMA conducted a further investigation into 2UE's compliance with the Disclosure Standard (and the Enforceable Undertaking) and prepared a report, titled "Compliance Assessment Report - Radio 2UE Sydney Pty Ltd" (2008 Report) detailing its findings.
13. The 2008 Report details the following conduct by 2UE:
13.1. at about 11.26am on 5 October 2007 no disclosure announcement was made that Hamilton Island Enterprises Ltd was a sponsor of John Laws at the time of an on-air mention of Hamilton Island;
13.2. at about 11.40am on 5 October 2007 no disclosure announcement was made that Hamilton Island Enterprises Ltd was a sponsor of John Laws at the time of an on-air mention of Hamilton Island;
13.3. at about 10.06am on 18 October 2007 no disclosure announcement was made that Byron Bay Beverages Pty Ltd was a sponsor of John Laws at the time of an on-air mention of Byron Bay Beer;
13.4. at about 10.28am on 18 October 2007 no disclosure announcement was made that Byron Bay Beverages Pty Ltd was a sponsor of John Laws at the time of an on-air mention of Byron Bay bitter;
13.5. at about 11.13am on 24 October 2007 no disclosure announcement was made that Toyota Motor Corporation Australia Ltd was a sponsor of John Laws at the time of an on-air mention of the Landcruiser;
13.6. at about 11.14am on 24 October 2007 no disclosure announcement was made that Byron Bay Beverages Pty Ltd was a sponsor of John Laws at the time of an on-air mention of Byron Bay Beer;
13.7. at about 10.10am on 24 October 2007 no disclosure announcement was made that Hamilton Island Enterprises Ltd was a sponsor of John Laws at the time of an on-air mention of Hamilton Island;
13.8. at about 11.51am on 26 October 2007 no disclosure announcement was made that Hamilton Island Enterprises Ltd was a sponsor of John Laws at the time of an on-air mention of Hamilton Island;
13.9. at about 11.21am on 2 November 2007 no disclosure announcement was made that Toyota Motor Corporation Australia Ltd was a sponsor of John Laws at the time of an on-air mention of Toyota;
13.10. at about 9.53am on 30 November 2007 no disclosure announcement was made that the Roche Group Pty Ltd was a sponsor of John Laws at the time of an on-air mention of John and Imelda Roche and the Roche family;
13.11. at about 10.21am on 30 November 2007 no disclosure announcement was made that Toyota Motor Corporation Australia Ltd was a sponsor of John Laws at the time of an on-air mention of the Toyota Hi-Lux;
13.12. at about 11.14am on 30 November 2007 no disclosure announcement was made that Toyota Motor Corporation Australia Ltd, Qantas Airways Ltd, Byron Bay Beverages Pty Ltd and Oatley Family Wines were sponsors of John Laws at the time of on-air mentions of Toyota, Qantas, Byron Bay lager and Wild Oats wine (expressed to be four (4) separate contraventions, but dealt with by the ACMA in its investigation as one (1)); and
13.13. at about 11.25am on 30 November 2007 no disclosure announcement was made that Toyota Motor Corporation Australia Ltd was a sponsor of John Laws at the time of an on-air mention of Toyota,
(together, Incidents).
The Incidents
14. In relation to each of the Incidents which were also identified at paragraphs 1.1 to 1.13 of the Application filed 26 November 2008 (Application) and reproduced at paragraph 13 above, 2UE admits:
14.1. that the Incident occurred as described therein (and as described in the 2008 Report);
14.2. that the incident constitutes a failure by 2UE to comply with cl 7(1)(a) of the Disclosure Standard which is a breach of a condition of 2UE's licence found in cl 8(1)(b) of Sch 2 to the Act; and
14.3. that the breach of the condition in cl 8(1)(b) of the Act constitutes a contravention of a "civil penalty provision", being s 140A(3) of the Act.
2UE's history of compliance with the Disclosure Standard
15. Since the commencement of the Disclosure Standard, and prior to the investigation resulting in the 2008 Report, ACMA and its predecessor have undertaken the following relevant investigations:
15.1. In November 2003 the ABA published a report of its finding following an investigation into breaches by 2UE of, amongst other things, the Disclosure Standard. This report relevantly found that 2UE breached the Disclosure Standard on ten (10) occasions for failing to cause a disclosure announcement to be broadcast at the time a sponsor's a name was mentioned during the broadcast of the John Laws Morning Show. It found a further nine (9) breaches of the Disclosure Standard for failing to broadcast a disclosure announcement in the prescribed form. The ABA investigation found a further six (6) breaches of a separate requirement then in force that required the licensee to disclose, on air, the existence of "major commercial agreements”, being commercial agreements the value of which was greater than $100,000 per year.
15.2. In September 2007 ACMA published the 2007 Report as detailed at paragraphs 9 to 11 above.
Fairfax/ 2UE's business
16. In March 2001, 2UE was acquired from Broadcast Investment Holdings Pty Ltd by Tricom Radio Holdings Pty Ltd (now known as Fairfax Radio Network Pty Limited) which in turn was wholly-owned by Southern Cross Broadcasting (Australia) Limited.
17. On 5 November 2007, a wholly-owned subsidiary of the Macquarie Media Group acquired Southern Cross Broadcasting (Australia) Limited.
18. On 9 November 2007, Fairfax News Network Pty Limited, a wholly-owned subsidiary of Fairfax Media Limited, acquired Tricom Radio Holdings Pty Ltd (now known as Fairfax Radio Network Pty Limited), the parent company of 2UE.
19. In respect of the Incidents referred to in paragraphs 13 and 14 above:
19.1. Four (4) Incidents relate to a period during which 2UE was ultimately owned by Fairfax Media Limited. The remaining Incidents occurred prior to Fairfax Media Limited acquiring 2UE from Southern Cross Broadcasting (Australia) Limited; and
19.2. Those four (4) Incidents occurred on John Laws’ last day as an on-air presenter for 2UE.
20. 2UE will separately provide evidence of its financial position.
Value of sponsorships held by John Laws
21. The value to John Laws of the commercial agreements with each of the entities (or sponsors) listed at paragraph 6.1, per annum, were as follows:
21.1. Balmoral Australia Pty Limited - more than $100,000 per annum;
21.2. Byron Bay Beverages Pty Ltd - more than $10,000 but less than $100,000 per annum;
21.3. Toyota Motor Corporation Australia Ltd - more than $100,000 per annum;
21.4. Roche Group Pty Ltd - more than $100,000 per annum; and
21.5. Qantas Airways Ltd - more than $100,000 per annum.
Agreement between parties on appropriate penalty
22. On or about 25 November 2008, ACMA and 2UE reached an agreement on what the parties regarded as an appropriate amount for 2UE to pay by way of a civil penalty order for each Incident in the 2008 Report. The parties agreed that an amount of $10,000 in respect of each of the thirteen (13) breach findings in the 2008 Report would be appropriate. ACMA and 2UE also agreed that 2UE would pay ACMA’s costs of the civil penalty proceedings fixed in the amount of $20,000.
23. The respective positions of the parties as regards this agreement will be set out in written submissions.
Steps taken by 2UE following the Incidents
24. Clause 4.2(b) of the Enforceable Undertaking requires 2UE to appoint an independent auditor who ACMA has approved to conduct five half-yearly audits to access 2UE’s compliance with the Broadcasting Services (Commercial Radio Compliance Program) Standard 2000 (Compliance Standard). The independent auditor has provided ACMA with 3 reports to date. The Independent Audit Reports states:
24.1. 2UE, in conjunction with its parent company, Fairfax Media, is currently undertaking a complete review of its compliance program, including manuals with a view to updating and improving the compliance policies and procedures and training sessions of staff of Fairfax Radio Network. From 17 October 2008 to 20 January 2009, the Group General Manager of Fairfax Radio Network, Mr Graham Mott, acted in the position of Acting General Manager of 2UE and a new person was being recruited for that position.
24.2. On about 28 January 2008 the Fairfax Radio Network appointed Ms Michelle Davies, Corporate Counsel for the Fairfax Radio Network, from the Fairfax Media Limited legal unit to ensure regulatory compliance by 2UE.
24.3. In February 2008, 2UE amended its monthly declarations in response to Part 3, the last paragraph on page 39 of the Report, to include a timeframe within which presenters must advise 2UE that the presenter has entered into a commercial agreement (or had amended an existing commercial agreement).
24.4. In February 2008, the Group General Manager of Fairfax Radio Network issued a policy that all ACMA B55 forms, that are required to notify ACMA of a change to the Register of Commercial Agreements, be reviewed and approved by the Group General Manager of Fairfax Radio Network and the Corporate Counsel of Fairfax Radio Network prior to lodgement with ACMA. This procedure ensures that we are aware of amendments to commercial agreements immediately and have the opportunity to review new commercial agreements.
24.5. From May 2008, in addition to the 2UE General Manager, the Group General Manager of the Fairfax Radio Network and the Corporate Counsel of Fairfax Radio Network are required to review all commercial agreements when they are received from presenters. This process is intended to ensure that no commercial agreement is misinterpreted.
24.6. From May 2008, 2UE includes a copy of any document which purports to vary or amend a commercial agreement, with the commercial agreement. This process is intended to ensure that 2UE is aware of any extension in the term of a commercial agreement.
24.7. From May 2008, the Senior Officer (as appointed under the Compliance Program) reviews all commercial agreements, notwithstanding that the claimed consideration is less than $100,000. This process is intended to ensure that all commercial agreements are disclosed in accordance with the Disclosure Standard.
Capacity of 2UE to pay the penalty
25. As stated in paragraph 18 above, the ultimate holding company of 2UE is Fairfax Media Limited, a company listed on the Australian Securities Exchange. 2UE has entered into a deed of cross guarantee with Fairfax Media Limited and thus has adequate provision for the payment of the agreed penalty and costs.
Co-operation with ACMA
26. 2UE has co-operated with ACMA during the conduct of its investigation, which resulted in the preparation of the Report. In particular, the parties note that:
26.1. 2UE complied with its obligation under paragraph 11.2 above.
26.2. 2UE has complied with its obligations under paragraph 11.3 above to date, except that the first report was provided by 2UE to ACMA on 7 December 2007, being 8 days after the due date of 29 November 2007.
26.3. 2UE and Fairfax Media Limited have at all times provided additional information to ACMA when requested by ACMA and have informed ACMA of the steps they have undertaken to improve their compliance program.
Deterrence
27. The Incidents referred to in the Application and the proposed penalty of $130,000 have been reported in news services, in particular in the radio industry, Australia-wide. The resulting publicity surrounding the Incidents and the penalty that 2UE faces is expected to heighten awareness of the requirements of the Disclosure Standard throughout the commercial radio industry in Australia.” (footnote references omitted)
THE CONTEXT IN WHICH THE ENFORCEABLE UNDERTAKING WAS GIVEN
56 The background circumstances to the enforceable undertaking referred to in the agreed facts (at [8]-[11]) involved a previous substantial failure of Mr Laws to make proper disclosure of his sponsorship arrangements. This background is relevant for the purposes of determining the pecuniary penalty under s 205F(3) of the Act.
57 Early in his program on Monday 28 August 2006, Mr Laws referred to the Commonwealth Government’s decision announced the previous Friday that it would sell shares in Telstra. Telstra was a sponsor of Mr Laws. During the course of that day’s program Mr Laws interviewed the then Prime Minister concerning the Telstra share sale, invited listeners to participate in a web poll on Mr Laws’ own website, read out emails from listeners and discussed with callers the proposed sale. The program lasted 3 hours, but at no stage did Mr Laws make a disclosure statement concerning his commercial agreement with Telstra. This is the event referred to in [10] of the agreed facts. Although that description referred to one breach of the disclosure standard of a failure to make a disclosure announcement. Mr Chapman’s media release of 26 November 2008 announcing the commencement of these proceedings said that the Authority had found that Radio 2UE had breached the disclosure standard 20 times during that broadcast. And, the transcript of the program and other evidence supports Mr Chapman’s description.
58 On 31 August 2006, Radio 2UE’s holding company wrote to the Authority drawing Mr Laws’ breaches of the disclosure standard to its attention. That letter informed the Authority that Radio 2UE was considering terminating Mr Laws’ contract. This was the event in [8] of the agreed facts. Around this time Mr Laws went on annual leave and returned to air on Tuesday 26 September 2006.
59 On 7 September 2006 Mr Mott together with, Tony Bell, the managing director of Southern Cross Broadcasting, Adam Olding, Southern Cross Broadcasting’s director of corporate affairs and general counsel and Radio 2UE’s then general manager, Simon Rufhus, met with senior counsel. Senior counsel advised them verbally that Mr Laws’ conduct did not entitle Radio 2UE to terminate his contract and that if it did so it would be likely to be in breach of contract itself. Senior counsel warned that that could expose Radio 2UE to liability for very substantial damages and that Mr Laws may also be able to assert an entitlement to “equitable remedies”. Mr Mott said that based on this advice Radio 2UE considered that it could not terminate Mr Laws’ contract until a court determined that he had materially breached it. Mr Mott said that the contract did not contain a provision that allowed Radio 2UE to suspend or stand down Mr Laws.
60 The second reading of the Bill for the 2006 amendments occurred in the Parliament on 14 September 2006. Mr Ruhfus, wrote to Mr Laws on 25 September 2006. Mr Ruhfus drew Mr Laws’ attention to extracts from a transcript of the program of 28 August 2006. He continued, referring to a clause of Mr Laws’ contract with Radio 2UE that:
“… requires compliance with … the obligations imposed on 2UE pursuant to ‘the Standards’ which includes the Disclosure Standard. The requirements of the Disclosure Standard have been raised and explained to you on numerous occasions, including as recently as 22 May 2006 when you were provided with personal training in relation to the Disclosure Standard by Adam Olding, the General Counsel of Southern Cross Broadcasting. …
This company is at a loss to understand why you failed to make the disclosure announcement as required by the Disclosure Standard.
As a consequence of your failure 2UE has failed to comply with the Disclosure Standard. This is a serious matter for this company. The issue is currently before the Australian Communications and Media Authority.
This company does not yet know what the consequences of your failure may bring from the Authority, nor indeed what may flow from activities of observers of this company’s radio station who operate in the public arena. There may well be unfavourable consequences for this company.
To say that this company is very seriously concerned about your failure and about its possible consequences would be an understatement.” (emphasis added)
61 The letter set out the clause in Mr Laws’ contract giving Radio 2UE the right to terminate it if his conduct caused Radio 2UE to be in breach of a condition of its licence or the disclosure standard (cl 7.4(d)).
62 On the same day, Mr Ruhfus and Mr Olding had a telephone discussion with Mr Laws who was in Hong Kong returning home from an overseas trip. They told Mr Laws about the breaches and reiterated the requirements of the disclosure standard. They told him that legislation was before the Parliament to give the Authority more power to prosecute breaches of the disclosure standard by imposing fines and enforceable undertakings. Mr Laws told them that he understood the nature of his obligations under the disclosure standard and that his failures on 28 August were “simply an oversight”. He then asked if Mr Rufhus and Mr Olding were threatening to treat his conduct as a breach of contract. Mr Olding’s file note recorded that Mr Laws “… said if we did so he’d walk”. Mr Laws also referred to the disappointment he would feel if Radio 2UE did that after all his years of loyal service.
63 Mr Rufhus and Mr Olding also had a discussion on 25 September 2006 with Mr Laws’ production team and re-emphasised the need for them to ensure compliance with the disclosure standard. They told the team of their concern about the nondisclosure. The team members indicated that they were either busy with other tasks and had not heard the broadcast of Telstra’s name or had heard it but failed to prompt Mr Laws to make a disclosure statement due to oversight.
64 In late October 2006, the Authority began an investigation of the breaches. Southern Cross Broadcasting informed the Authority that Mr Laws had indicated that he was aware of the requirements of the disclosure standard and that his failure to comply was an oversight.
65 Mr Mott met with Mr Laws in late November 2006 and discussed compliance with the standards,in particular the disclosure standard. Mr Laws said to Mr Mott that he was aware of the requirements of the disclosure standard and was “… doing everything possible to comply with them”.
66 On 14 March 2007 Mr Mott wrote to Mr Laws informing him that since 4 February 2007 the Act had been amended (i.e. by the 2006 amendments) so that the Authority had additional enforcement powers including the power to seek civil penalty orders and to accept enforceable undertakings. Mr Mott wrote that the imposition of a civil penalty would be a matter of grave concern to Radio 2UE and would bring it into disrepute. He said his purposes in writing were to remind Mr Laws of his contractual obligation to comply with the standards made under the Act, to notify him formally of the Authority’s new powers and to inform him that Radio 2UE would consider its rights under their contract with him should he fail to comply with the standards. Mr Mott noted that the Authority’s investigation into the 28 August 2006 breaches was continuing and his letter was not a waiver of Radio 2UE’s rights. He wrote that he wanted to highlight to Mr Laws how seriously Radio 2UE regarded compliance with the standards. Mr Mott added:
“In light of previous compliance difficulties, I thought it was important to highlight the changes to the legislation and confirm our views on this issue.” (emphasis added)
67 During the next two days Mr Laws met with Mr Mott twice to discuss the letter. Mr Mott told Mr Laws that any further breaches of the disclosure standard would be unacceptable to Radio 2UE. He said that Radio 2UE had a right to terminate the contract for a breach of Mr Laws’ obligation to comply with the standards and, if such a failure occurred it would consider its rights. After the second conversation Mr Mott flew to Melbourne to report to Mr Bell on his discussions with Mr Laws.
68 On 11 May 2007 the Authority provided Mr Bell with a draft report on its investigation of the 28 August 2006 breaches and, pursuant to the Act, afforded Southern Cross Broadcasting with an opportunity to comment. South Cross Broadcasting responded to the draft report on 28 May 2007.
69 Around the beginning of June 2007, Mr Laws informed Mr Bell, of his intention to retire from on-air presenting. Mr Laws met with and told Mr Mott of this on 6 June 2007. They agreed that Mr Laws’ last day on-air would be 30 November 2007. Under the contract, Mr Laws could retire on giving 6 months notice and this date would coincide with the end of the calendar year season in the industry, which would allow sufficient time to arrange for Mr Laws’ replacement in an orderly way. Mr Mott also agreed to this period of notice because Mr Laws also had not committed any further breaches of the disclosure standard since 28 August 2006. He gained confidence from this that Mr Laws was taking his obligations to make disclosure announcements seriously and had reformed.
70 On a number of occasions Mr Mott suggested to Mr Laws that he should disclose his commercial agreements simply and in a positive way. He told Mr Laws that by mentioning a sponsor or their product and then making a disclosure statement in a negative manner, the negativity reflected back onto the sponsor or their product. Mr Mott formed the view from these discussions that Mr Laws genuinely accepted that he was doing a disservice to the sponsors by being negative when making disclosure statements.
71 Mr Laws expressed the view to Mr Mott on a number of occasions between 14 March 2007 and 6 June 2007 that on-air presenting had become harder over the previous few years largely as a result of the obligations placed on him by the disclosure standard. Mr Mott believed from his meetings and conversations with Mr Laws after 28 August 2006 that the pressure which he and other senior executives in Southern Cross Boadcasting, including Mr Bell and Mr Olding had exerted on him in respect of his history of non-compliance with the disclosure standard, had played some part in his decision to retire. On 25 June 2007, Mr Laws announced on his program that he was retiring from on-air presenting.
THE CONTEXT IN WHICH RADIO 2UE FAILED TO CAUSE COMPLIANCE BY MR LAWS
72 On 3 July 2007 Southern Cross Broadcasting agreed conditionally on the sale of its radio network to Fairfax Media. Mr Mott said that Southern Cross Broadcasting considered itself to be in a caretaker role of the parts of its commercial radio network that were to be sold pending completion of that acquisition in early November 2007.
73 On 24 September 2007, Radio 2UE gave an enforceable undertaking to the Authority pursuant to s 205W of the Act. The enforceable undertaking contained a specific obligation to monitor Mr l\Laws’ program in cl 4.1, including the following terms:
“4.1 Compliance with the Disclosure Standard
(a) Monitoring of the John Laws Morning Show
Within two weeks of the commencement of this undertaking, 2UE will implement an effective administrative system for monitoring each broadcast of the John Laws Morning Show to ensure compliance with section 7 of the Disclosure Standard. The system will include a requirement that, in the event that a disclosure announcement of the kind described in section 7(3) of the Disclosure Standard is not made in accordance with section 7(1) of the Disclosure Standard, 2UE will take action to cause such a disclosure announcement to be broadcast at the earliest opportunity in that program, and will report in writing to ACMA within 72 hours of such failure to comply with the Disclosure Standard, providing details of the non-compliance and of the action taken.
(b) Independent review of the John Laws Morning Show
Within two weeks of the commencement of this undertaking, 2UE will appoint an independent person to review at least four programs per fortnight of the John Laws Morning Show. The first fortnight will commence on the Sunday following the commencement of this undertaking. 2UE will provide recordings of the programs to the independent person and, if requested by the independent person or ACMA, provide transcripts of those recordings. The independent person appointed will prepare a report on compliance with section 7 of the Disclosure Standard, based on the review of the programs. The independent person appointed will provide a copy of each report to ACMA within 14 days of the end of each fortnight.”
74 Thus, the enforceable undertaking specifically addressed the past shortcomings of Radio 2UE, through its presenter, Mr Laws, in making disclosure announcements that Radio 2UE was required to make. It had to “implement an effective administration system for monitoring each broadcast” of Mr Laws’ program to ensure compliance with cl 7 of the disclosure standard.
75 Next, on 25 September 2007, the Authority published its report on the 28 August 2006 breaches. The findings that report would make when published had led to Radio 2UE giving its enforceable undertaking. Radio 2UE had to monitor Mr Laws’ program under cl 4.1(a) from 1 October 2007. It appointed an independent reviewer on 4 October 2007.
THE CIRCUMSTANCES OF THE 13 CONTRAVENTIONS
76 The contraventions concerned the following valuable commercial agreements that Mr Laws had with his sponsors. (I have used the numbering of the order of the contraventions set out in [13] of agreed facts in these reasons.)
· Contraventions 1, 2, 7, 8 and 12 involved Balmoral Australia Pty Limited. It had a commercial agreement with Mr Laws for more than $100,000 p.a.
· Contraventions 5, 9, 11, 12 and 13 involved Toyota Motor Corporation Australia Limited. It had a commercial agreement with Mr Laws for more than $100,000 p.a.
· Contravention 10 involved Roche Group Pty Limited. It had a commercial agreement with Mr Laws for more than $100,000 p.a.
· Contravention 12 also involved Qantas Airways Limited. It had a commercial agreement with Mr Laws for more than $100,000 p.a.
· Contraventions 3, 4, 6 and also 12 involved Byron Bay Beveridges Pty Limited. It had a commercial agreement with Mr Laws that was for more than $10,000 but less than $100,000 p.a.
77 Contravention 1 involved Mr Laws mentioning a sponsor on-air but failing to make a disclosure announcement until 90 seconds later in the broadcast. Contravention 6 involved a caller, on Mr Laws’ talkback radio session, mentioning a sponsor on-air and then Mr Laws failing to make a disclosure announcement until 10 minutes later in the broadcast.
78 The independent reviewer described contraventions 5 and 6 in her report of 26 October 2007 as follows:
“In one Toyota mention at 11:13am on Wednesday October 24th, a caller mentioned Toyota and said John should ring the bell. John did ring the bell but failed to declare Toyota as sponsors of his.
In the same incident at 11:13am on Wednesday October 24th John Laws rang the bell when a caller mentioned Byron Bay Beer but did not declare his sponsorship agreement. Ten minutes later at 11:33am,[sic] obviously reacting to prompting John said “did I say Byron Bay Beer are sponsors of mine? I think I did” followed by a rant about being monitored.” (emphasis added)
79 None of the other 11 contraventions resulted in a disclosure announcement being made at all on the day of the broadcast. Contraventions 2, 4, 5, 7, 8, 11 and 12 also involved callers who made an on-air mention of a sponsor during a talkback radio session in Mr Laws’ program. Contravention 8 occurred on Friday 26 October 2007 at 11.51 a.m. in a segment of Mr Laws’ program called “The Best of the Lawsy Week”. On that occasion a recording of contravention 7 taken from the previous Wednesday’s program, was replayed. That segment, I infer, was a collection of recordings from earlier in the week that Mr Laws, or those producing his program, considered sufficiently memorable or significant that they were repeated. Thus, whoever chose to repeat contravention 7 was reckless about the disclosure standard. This was not a mere failure of the internal monitor or Mr Laws. Rather, it demonstrated the absence of any real understanding within those responsible at Radio 2UE for compliance on Mr Laws’ program with the disclosure standard. Contravention 8 should never have occurred because it was part of a pre-recorded segment that had been chosen for repetition.
80 In the case of contraventions 7 and 8, a disclosure announcement of sorts relating to them was broadcast on 29 October 2007 at approximately 9.11am when Mr Laws said the following:
“Remember ‘Stormin’ Norman’ last week? Norman was the caller that rang us on Wednesday howling against just about everything we do on this program. He didn’t like my alleged bias … I don’t know what bias he referred to … he didn’t like the fact that I’d been reasonably successful and he didn’t like the fact that I’m an ambassador for Hamilton Island. As you know Hamilton Island are sponsors of mine and I think in the heat of the moment … maybe we didn’t mention that the other day, but of course we live in this environment of total terror and we have to say that Hamilton Island are sponsors of mine in order to appease the Nazis and also to appease the terrified management of this broadcasting station. I hope you are now all duly appeased. We can get on with our lives. At least just for four more weeks, JUST LEAVE ME ALONE (cuts to music).” (emphasis in the Authority’s report)
81 It is obvious from the above extract, that Mr Laws had been told he had failed to make a disclosure announcement and had been required to make the disclosure later. I will return to the content of that statement below. In fact, Mr Ruhfus had written to the Authority late in the afternoon of 26 October 2007, the day of the broadcast on which contravention 8 occurred, drawing its attention to Mr Laws’ failure to make a disclosure. I do not consider that statement to have been sufficiently close in time to have any palliative effect.
82 The final contravention (13) occurred at approximately 11.25 am on Mr Laws’ last 35 minutes of presenting before his retirement was to occur. He had just finished talking to the well known singer, Normie Rowe, who had mentioned Byron Bay Beer. Mr Laws said:
“And of course I’ve got to say Byron Bay Beer are sponsors of mine.”
As shown in the Authority’s report, Mr Laws then went on to say:
“How bloody stupid. When are you people going to get over it? Never? What are you going to do next week when you don’t have to sit around and listen to me all day in case I say Toyota? [pause] Oh did you hear that, Alice? He said Toyota! God! Boring old bastards! 13 13 32 is our telephone number. [pause] No, not our people here, the people at the … whatever you call it, what do you call it? ACMA. As I said yesterday, it sounds like a skin ailment.”
THE SUBMISSIONS
83 The Authority submitted that it expected that the proposed declarations, pecuniary penalties and costs order would assist in raising awareness of the disclosure standard throughout the commercial radio broadcasting industry in Australia and contribute generally to deterrence from similar conduct by licences. In addition, the parties submitted that those orders would be a specific deterrent to Radio 2UE. The joint submissions addressed a number of issues, and these were elaborated upon or supplemented by further submissions of each of the parties and the Centre.
84 In determining a pecuniary penalty under s 205F(3) the Court is not confined to considering any of the four particular matters referred to in subparagraphs (a) – (d). Rather, as the chapeau to s 205F(3) provides, the task is to “have regard to all relevant matters”. There is a degree of overlap in the considerations relevant to s 205F(3)(a) and (c). It is not easy to segregate a matter as being wholly within one or the other of those two subparagraphs. In my opinion it is not necessary to make any bright line segregation, so long as any matter which is itself relevant is considered in accordance with s 205F(3).
1. Public interest considerations
85 The Centre argued that holding a licence imposed important legal, social and ethical duties and obligations on a licensee. These included compliance with the disclosure standard. The Centre argued, and the Authority accepted, that the disclosure standard was a cornerstone on which the responsibility of the licensee to the public was built. The Centre argued that the seriousness of the contraventions was underlined by the 23 related breaches of the enforceable undertaking to which I have referred above. The joint submissions recognised that the enforceable undertaking was a relevant matter to take into account as one of the circumstances in which the contravention occurred for the purposes of s 205F(3)(c). I accept that that is so.
86 The Centre argued, and the Authority accepted, that a licensed broadcaster enjoyed a position of public trust and that the community was entitled to have confidence in the honesty and candour of broadcasts by a licensed commercial broadcaster. The Centre also argued that it was vital in a democratic society that citizens be able to obtain reliable news, information and editorial commentary from trustworthy sources. The Centre contended that, in that context, members of the audience would then be in a secure position to decide what weight to give to news, current affairs and commentary received from various reliable sources. The Centre argued that the community was entitled to expect that commercial broadcasting radio licensees would adhere to the ground rules for conduct of their licence, including the disclosure standard so as to present their programs without hidden bias or hidden interests influencing the discussion. It argued that without the disclosure of the presenters’ interests, the interests of his or her undisclosed sponsors would be served and that it was important to maintain a proper distinction between advertisement and editorial comment. It argued that compliance with the disclosure standard was critical for that purpose.
87 And, the Centre argued that a failure to comply with the disclosure standard prevented or impeded the fair and accurate coverage of matters of public interest contrary to the object expressed in s 3(1)(g) of the Act. The Centre argued that the fact that the 13 contraventions involved commercial products and services did not detract from its argument. It said that information about those products and services influenced the public’s views about them which in turn informed their attitude towards social, economic, commercial and political conditions. Products and services were, it contended, part of the public’s day to day lives and these were not unimportant.
88 The Centre also argued that the community knew that commercial radio broadcasters such as Radio 2UE were regulated and would assume that what they heard on Radio 2UE complied with the regulatory regime in place. It argued that the contraventions were a serious breach of the public trust which the community was entitled to repose in commercial radio broadcasting licensees adhering to the conditions of their licences. It also argued that undisclosed sponsorship and endorsements had an adverse affect on the market for the relevant goods and services. The Centre argued that an undisclosed sponsorship or endorsement implied that the presenter had a particular preference for the goods or services of a trader, as opposed to those of a competitor, and used his position of experience to persuade consumers to purchase in accordance with the recommendation, which was not his or her own genuine opinion, but a recommendation that had been purchased.
89 The Authority contended that the proceedings for a penalty were in aid of protecting the public interest which the disclosure standard was created to protect. It argued that a primary question was whether or not a penalty was within a range adequate to deter the respondent and others from further contraventions of the standard. The Authority argued that in arriving at the agreed penalty it had considered the relevant objective and subjective factors, the importance of deterring Radio 2UE and the need to alert others to comply with the disclosure standard. It also noted that there had been a marked difference in the compliance culture and record of Radio 2UE since it came into new ownership. The Authority argued that the agreed penalty had regard to the number of breaches, their seriousness and Radio 2UE’s persistence in them, rather than the nature of the individual breaches themselves. It contended:
“If a penalty is given in the upper range, [the Authority] would face uncertainty in determining an appropriate penalty range in relation to breaches that are both large in number and potentially more damaging to the public interest in transparency, for example, undisclosed commercial sponsorship arrangements.”
90 I reject that last argument. If there were a large number of such breaches which were potentially more damaging to the public interest in transparency, the Authority has other sanctions to impose in the event that it considers a pecuniary penalty at the upper end of the range is not sufficient, by itself, to deal with the contraventions of the Act. If there were a large number of contraventions, a penalty at the high end of the range would simply increase proportionately to the number of contraventions. Moreover, the Authority will be guided by the views of the Court in these proceedings where it has had the benefit of having a contested argument on the penalty to be imposed.
91 The Centre argued that the parties had not explained in their submissions why, applying the proper principles, the agreed penalty was appropriate. It pointed to the public nature of the licence and the right and opportunity a licensee had to operate a commercial broadcasting business based on the exploitation of the public asset being the radio spectrum. The Centre argued that the penalty should be in the upper half of the range and thus significantly higher than the agreed sums. It argued that the agreed penalty did not give adequate weight to the public interest aspects of the agreed facts and the surrounding background circumstances.
92 Radio 2UE argued that the joint submissions had identified the Authority’s concern about Mr Laws’ inappropriate attitude to the disclosure standard and the failure by Radio 2UE to comply with it, but submitted that there were substantial mitigating factors warranting a lower penalty. Radio 2UE argued that there was a public interest in bringing the litigation to a speedy resolution resulting in savings of resources for the Authority and the Court: Mobil (2004) ATPR ¶41-993 at 48,624 [41] and 48,627 [53].
93 However, as Branson, Sackville and Gyles JJ said there, arguments in favour of the negotiation of settlements have to take account of the fact that it is the Court that bears the ultimate responsibility for determining the appropriate penalty: Mobil (2004) ATPR ¶41-993 at 48,627 [53].
2. The nature and extent of the contraventions: s 205F(3)(A)
94 The parties submitted that the 13 contraventions related only to Mr Laws’ program and not to any other programs broadcast by Radio 2UE. They pointed to the fact that Mr Laws ceased to be an on-air presenter for Radio 2UE following his retirement on 30 November 2007. And, the parties submitted that it was relevant that Fairfax Media acquired Radio 2UE on 9 November 2007 and that only the last four contraventions occurred after that time and then on the last day of Mr Laws’ career.
95 The Authority argued that Mr Laws’ commercial agreements were recorded on the register and there were various on-air disclosures even though not all of them were compliant with the disclosure standard. It argued that Mr Laws has now retired and there was no specific deterrent necessary for his conduct. It argued that the new compliance regime adequately addressed the concerns arising from the previous regime. The Authority noted that Radio 2UE had not deliberately engaged in the conduct and had taken steps to prevent it. It accepted that Radio 2UE had acted bona fide, even if it had been ineffectual, in seeking to regulate Mr Laws.
96 Radio 2UE also argued that it was necessary to take everything into account before arriving at a penalty. The last day of Mr Laws’ broadcasting was one in which the compliance system failed to bring about an end to his contraventions. The particular contraventions did not, so Radio 2UE argued, go to the heart of freedom of speech and the other important objectives of the Act.
3. Loss or damage caused by contraventions: s 205F(3)(b)
97 There was no quantifiable loss or damage caused by the conduct engaged in by Radio 2UE for the purposes of s 205F(3)(b) of the Act. Neither Radio 2UE nor the Authority has received any claim or demand from a third person in relation to any alleged loss or damage suffered by them. That is hardly surprising since the nature of the breaches of the disclosure standard were unlikely to cause any loss or damage. However, the parties acknowledged that the absence of such loss or damage was not itself a mitigating factor. I accept this submission.
4. The circumstances in which the contraventions took place: s 205F(3)(c)
98 The parties submitted that the enforceable undertaking had been in place from 24 September 2007. It required Radio 2UE to implement an administrative system to ensure compliance by Mr Laws’ program with the disclosure standard and that the first contraventions took place on 5 October 2007. The parties relied on the fact that Radio 2UE had engaged an internal monitor as part of its administration system. The sole function of the internal monitor was to monitor Mr Laws’ program and ensure compliance with the disclosure standard by prompting him or the executive producer, if disclosures were not made appropriately. The parties relied on Mr Mott’s evidence of his belief that this would be an effective administration system. In addition, the Authority had approved the general framework of that system and also believed it would be effective to ensure compliance.
99 The joint submissions noted Radio 2UE’s concession that, with the benefit of hindsight, the administration system was not effective. They submitted that the internal monitor was not adequately experienced or trained and, among other things, Radio 2UE should have appointed another person to review the recorded broadcast, after the live to air program, as occurred when the independent reviewer listened to pre-recordings. The parties also submitted that during the period in which the contraventions occurred Radio 2UE had a compliance policy and had provided training to Mr Laws and all staff working on his program in addition to the annual training that they received. They submitted that the contraventions occurred due to human error, being oversights of Mr Laws, the staff working on the program and the internal monitor.
100 The Centre argued that the 13 contraventions occurred in circumstances where Radio 2UE had not taken its obligations to establish a compliance system sufficiently seriously. The Centre argued that the obligation of a commercial radio broadcasting licensee to comply with the disclosure standard was critical to its entitlement to remain licensed. In that context, and in light of the failure of Radio 2UE’s previous attempts to comply with the disclosure standard, the giving of the enforceable undertaking and Mr Laws evident dislike of the requirements of the disclosure standard, the Centre contended that the appointment of the person who was the internal monitor for Mr Laws’ program was not sufficient. The Centre did not intend to criticise the appointee. Rather, it argued that because he was not sufficiently senior it could not be expected that he would be able to ensure that Mr Laws complied with the disclosure standard.
101 The Centre argued that having regard to Mr Laws’ recidivism in respect of his previous contraventions of the disclosure standard, Radio 2UE should have made a substantially more serious effort to ensure that Mr Laws complied in the future at the time of the giving of the enforceable undertaking. It argued that ordinary businesses would take measures of sufficient strength to ensure that they would continue to be able to meet the conditions of a commercial broadcasting radio licensee’s major resource, namely the continued entitlement to hold, and operate under, the licence.
102 Radio 2UE argued that the Centre’s criticisms of its compliance system were made without any evidence and simply reflected hindsight. It argued that the Centre’s submissions ignored that the Authority had been aware of and approved the compliance system introduced at the time of the giving of the enforceable undertaking with the awareness and approval of the Authority.
103 The parties relied on the evidence that after all the contraventions had occurred, Radio 2UE had implemented a number of significant changes to its compliance policies. They submitted that they expected that those changes would improve Radio 2UE’s future compliance with the disclosure standard when coupled with the deterrent effect of the penalty to be imposed in these proceedings. The parties submitted the sentencing purpose of deterrence would be served where a lower penalty was imposed if it would lead to the contravenor’s future compliance because of further steps it had taken, such as effective and efficient improvements to its compliance system.
5. Past proceedings: s 205F(3)(d)
104 Radio 2UE has not been found by a court to have engaged in any similar conduct under the Act for the purposes of s 205F(3)(d). However, the parties acknowledged that the Authority and its predecessor had previously conducted investigations into breaches of the disclosure standard by Radio 2UE in relation to Mr Laws’ program, and that the results of those investigations in 2003 and 2006 had been set out in [11] and [15] of the agreed facts. As I have said, the other evidence suggests that the 28 August 2006 program involved a significant number of contraventions of the disclosure standard.
105 Radio 2UE said that the Court could not consider historical events prior to August 2006, beyond the material in the agreed facts in the joint submissions. However, I consider that it is appropriate to have regard to the whole of the evidence, and the explanatory memorandum before the Parliament, which the parties provided, leading to the enactment of the 2006 amendments. And, as Radio 2UE accepted, the disclosure standard was introduced as a result of the historical events involving Radio 2UE and Mr Laws, among other presenters, including the 2000 enquiry by the Authority’s predecessor. On the other hand, I accept Radio 2UE’s argument that the Centre was not granted leave, as intervenor, to tender any evidence and is not entitled to rely on material outside the evidentiary context, or the Parliamentary materials.
6. The deliberateness of the contravention
106 The joint submissions drew attention to Mr Laws’ comments on 29 October 2007 together with those made by him when contravention 13 occurred on 30 November 2007. The comments on 29 October related to both contraventions 7 and 8. I have dealt with Mr Laws’ inappropriate comments of 29 October and 30 November above at [79]-[81].
107 The parties submitted that Mr Laws was aware of the requirements of the on-air disclosure. I am satisfied that this is correct. They then argued that he had indicated publicly on-air that his view of the requirement was that it was “excessive”. They argued that it was relevant to note that contravention 8 occurred before Fairfax Media acquired Radio 2UE and contravention 13 on Mr Laws’ last day. Their submissions continued:
“If it were not for the other mitigating factors a substantially higher penalty would have been attracted. Nevertheless, it is submitted that the proposed penalty is sufficiently substantial to alert others that the on air disclosure requirement must be complied with.
Notwithstanding John Laws’ attitude, the parties submit that the evidence indicates that John Laws’ failure to disclose was careless.”
108 In support of the argument that the failure was “careless”, the parties argued that 8 of the 13 incidents were on-air mentions of a sponsor by callers, as opposed to those initiated by John Laws and that three of the failures to make an on-air disclosure announcement were an oversight where an announcement was made subsequently, although not so as to comply with the disclosure standard.
7. Whether the contravention arose out of conduct of senior management or at a lower level
109 The parties submitted that Mr Mott’s evidence indicated that the failure to comply with the disclosure standard occurred at a lower level and that they were not reported to senior management by personnel at the time they occurred. I will consider this submission in detail later.
8. Radio 2UE’s corporate culture
110 The joint submissions noted that Radio 2UE’s former ultimate holding company, Southern Cross Broadcasting had reported some suspected breaches of the disclosure standard to the Authority. The joint submissions also referred to Radio 2UE’s comprehensive compliance policy that is now in place. The submissions acknowledged the earlier policy had been ineffective in preventing the contraventions. Since then Radio 2UE has undertaken a number of steps to ensure that similar contraventions do not occur. The joint submissions pointed to a number of matters, including the new parent company, Fairfax Media, undertaking a complete review of the compliance program and updating manuals and training materials. And, they noted that contracts for presenters are being reviewed and a new clause has been inserted in renewed or new contracts enabling Radio 2UE to suspend presenters in circumstances where a breach of contract is suspected, including a contravention of the disclosure statement.
111 The joint submissions also noted that a new general manager had been appointed to Radio 2UE in January 2009 and he has over 20 years experience in the radio industry in senior positions. Fairfax Radio Network appointed a member of its legal unit to ensure regulatory compliance by Radio 2UE and she has had previous experience with Southern Cross Broadcasting’s legal team. In September 2008 Radio 2UE began a new internal intranet capable of being accessed by all its staff, that includes copies of the compliance policy, the standards made under the Act and Codes. In February 2008 Radio 2UE placed a time frame on presenters having to disclose their commercial agreements or amendments to existing ones. It also undertook a number of reviews of compliance with notifications for commercial agreements. The Authority expected that those steps would improve the compliance environment within Radio 2UE and will have the result of improving its compliance culture.
9. Radio 2UE’s Co-operation with the Authority
112 The parties submitted that Radio 2UE had co-operated with the Authority throughout its investigation of the current contraventions and its earlier one in 2006 that led to the enforceable undertaking. The Authority accepted that this co-operation had occurred both through Radio 2UE and its ultimate holding companies. They submitted that the expense of a contested hearing was averted by the co-operation of Radio 2UE and its parent companies, Southern Cross Broadcasting and Fairfax Media, demonstrating a willingness to accept responsibility and facilitate the course of justice.
113 In addition, the parties relied on Radio 2UE’s admissions of the contraventions, as acknowledgement of liability and co-operation with the Authority, its contrition and its commitment to improving its compliance program and continued introduction of measures to improve that program.
114 The Authority also argued that the Centre’s submissions did not take into account what it contended was the significant public interest promoted by Radio 2UE admitting liability before the proceedings were even commenced. Radio 2UE also argued that there was a public interest in not imposing a penalty that was oppressive having regard to the compliance measures subsequently put in place and the views of the authority as to their appropriateness.
10. Breach of the enforceable undertaking
115 The Centre noted that the Authority’s report No 2100 had identified not only 13 breaches of cl 7(1) of the disclosure standard, but also a total of 23 breaches of cl 4.1(c) of the enforceable undertaking arising out of the 13 breaches. There were two classes of breach of the enforceable undertaking, one being 12 instances where Radio 2UE had not taken action to broadcast a disclosure after a non-disclosure by Mr Laws, the second being 11 instances where Radio 2UE had not reported the failure to disclose and the action it had taken to the Authority within 72 hours. Those additional matters are not the subject of this application for civil penalties. The Centre argued that the Authority had conflated each of those 23 additional matters with the 13 breaches of cl 7(1).
116 I do not consider that in these proceedings it is appropriate to punish Radio 2UE by imposing a heavier penalty for the 13 contraventions because of its further breaches of the enforceable undertaking. The circumstances in which those further breaches occurred are nonetheless relevant, in accordance with s 205F(3) of the Act, for the purpose of assessing the conduct of Radio 2UE, because of their contemporaneity and interrelation with the 13 contraventions and the extent to which they went unremedied: cf Weininger v The Queen (2003) 212 CLR 629 at 640 [32] per Gleeson CJ, McHugh, Gummow and Hayne JJ.
11. Alternative enforcement options
117 The Centre identified other enforcement powers that were available to the Authority, which it had not sought to use in this matter. It relied on the context of the Parliament’s decision to expand the potential remedies available to the Authority. Under s 143(1) the Authority was given power, by notice in writing, to suspend a licence for such period, not exceeding three months as was specified in the licence or to cancel the licence where a commercial radio broadcasting licensee breached a condition of the licence. In addition, s 205X provided the Authority with power to apply to the Court, where a person had given an enforceable undertaking under s 205W that the Authority considered had been breached, for orders that included any order that the Court thought appropriate (s 205X(2)(d)). The Centre argued, that accordingly, the Authority had formed the view that it would proceed with the less drastic remedy of seeking pecuniary penalties under s 205F and declaratory relief.
118 The Authority and Radio 2UE both argued that the availability of other sanctions was not relevant to the quantum of a civil penalty to be imposed and that Radio 2UE should not be penalised more severely because of the existence of other enforcement remedies which the Authority chose not to employ. I accept that submission.
12. Deterrence
119 The Authority argued that because of its central role in the regulation of the industry and the place which the Act gave it in that regard, it was well placed to assist the Court in identifying the appropriate range of penalties. Moreover, the Authority argued that its contacts with industry gave it an insight into the level of penalty which would be seen as a sufficient deterrent to avert other breaches. The Authority accepted the submissions made by the Centre that there was a significant public interest in radio presenters of current affairs program not having undisclosed sponsors. The Authority argued that the protection of the public interest was not an independent factor which had to be given weight when assessing the penalty along with other relevant factors, but simply the outcome of the penalty process.
120 Radio 2UE also contended that weight should be given to the Authority’s views that the publicity surrounding the contraventions as well as the amount of the proposed penalty of $130,000 in total would operate to deter future breaches by both itself and other licensees and heighten awareness of the requirements of a disclosure standard. And, Radio 2UE contended that it had considered the possibility of terminating Mr Laws’ contract after the 2006 contraventions, but did not do so based on senior counsel’s advice. This showed, it argued, that it had taken those breaches sufficiently seriously.
121 The Centre argued that the agreed penalties would not be an effective sanction nor credible in the eyes of the community. Radio 2UE disputed the Centre’s arguments that the joint submission had not given sufficient attention to public interest considerations. Radio 2UE also argued that while the history of Mr Laws’ contraventions of the disclosure standard provided a context they should not be given undue weight. It was not liable in these proceedings to a penalty for its prior conduct. Rather, it argued that it had demonstrated its responsibility by bringing Mr Laws’ contraventions in August 2006 to the Authority’s attention. And it argued that the occurrence of the 13 contraventions after, and in breach of the enforceable undertaking, should not be seen as an aggravating circumstance. It argued that it took about 12 months work between Radio 2UE and the Authority to arrive at a compliance system to satisfy the Authority that the enforceable undertakings were acceptable.
FINDINGS: NATURE, EXTENT AND CIRCUMSTANCES OF THE CONTRAVENTIONS
122 I accept that live to air broadcasting, especially involving talk-back radio where spontaneous statements are made, requires licensees, their staff and presenters to be attentive and make disclosure announcements in a very short time frame. But that is the ordinary standard for such broadcasting to meet. The disclosure standard applies and is enforced as a condition of the licence. The enforceable undertaking was offered by Radio 2UE as a means of satisfying the Authority that, despite Mr Laws known recidivism in relation to the disclosure standard, Radio 2UE would take appropriate measures to prevent recurrence.
123 I reject the parties’ submission that the contraventions arose at a lower level of management. Persons in the position of Mr Laws were recognised by s 4(1) of the Act to be in a position to shape community views in Australia. Mr Laws was a well-known and seemingly influential “star”. His views and endorsements appear to have been so significant that he could invite the Prime Minister to appear on his show to discuss current affairs (such as the occasion which led to the enforceable undertaking). As the Centre pointed out in its submissions, the ability of the media, including radio, to influence public perceptions of events is significant.
124 Radio 2UE had a privilege conferred on it under the Act to conduct a broadcasting service on the public radio spectrum. Conditions of its licence required it to ensure that the disclosure standard’s requirements were met. Mr Laws had significant and valuable commercial agreements with six different sponsors in 2007. I infer that those sponsors saw considerable benefit to their businesses in having Mr Laws refer to and promote their names and brands, products or services in as favourable light as possible. It can also be safely inferred that he was seen by his sponsors to be able to use Radio 2UE’s licence to influence public awareness and opinion with respect to their own products or services (see s 4(1) of the Act). Material which is designed or calculated to draw public attention to a person, product or service or to promote its use may constitute an advertisement: Director of Public Prosecutions v United Telecasters Sydney Ltd (1990) 168 CLR 594 at 598 per Brennan, Dawson and Gaudron JJ, 605 per Toohey and McHugh JJ. And, Radio 2UE was conscious that Mr Laws was not only able to use its licence in this way, but that he had done so.
125 Section 140A(3) in terms, imposes liability directly on a licensee by requiring it not to breach a condition of its licence set out in cl 8(1) of Sch 2 to the Act. That liability is not a vicarious liability imposed on Radio 2UE for the conduct of its presenters, but a direct liability on it: Hamilton v Whitehead (1988) 166 CLR 121 at 127-128. There, Mason CJ, Wilson and Toohey JJ held that when an employee acted in the course of his or her employment he or she did so as the embodiment of the corporate employer: Hamilton 166 CLR at 127; Tesco Supermarkets Ltd v Nattrass [1972] AC 153 at 170 per Lord Reid. Under s 140A(3) a corporation will incur liability for what its agent, Mr Laws, did or failed to do to comply with the disclosure standard. This is because Mr Laws was acting as the licensee when using its licence to broadcast his program. Mason CJ, Wilson and Toohey JJ said of a provision similar to s 140A(3) in Hamilton 166 CLR at 127 that it:
“... speaks directly to the company. It is not a case of a company being made liable for an act performed by a servant of the company on its behalf. The liability imposed is direct, not vicarious. The distinction was drawn by Viscount Haldane LC in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd ([1915] AC 705 at p 173). Its significance is explained by Lord Reid in Tesco Supermarkets Ltd v Nattrass ([1972] AC 153 at p 170):
‘I must start by considering the nature of the personality which by a fiction the law attributes to a corporation. A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company. It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent. In that case any liability of the company can only be a statutory or vicarious liability.’
See also the statement of Denning LJ in H L Bolton (Engineering) Co Ltd v T J Graham & Sons Ltd ([1957] 1 QB 159 at p 172).
There can be no doubt, on the facts of the present case, that the respondent, in placing the advertisement and in dealing with those who replied to it, was the company. He was its managing director and his mind was the mind of the company. The company therefore was liable as a principal for the breaches of s 169 of the Code. The liability was direct, not vicarious.” (emphasis added)
126 A breach of the disclosure standard by Mr Laws was also a breach by Radio 2UE. The joint submissions appeared to divide Mr Laws’ responsibility for breaching the disclosure standard from that of Radio 2UE. In my opinion, this is a fundamental misconception. When Mr Laws committed each of the contraventions complained of, he was Radio 2UE. He was not merely an agent or minor employee for whose acts or omissions Radio 2UE was vicariously responsible. Rather, Mr Laws was the embodiment of Radio 2UE using its commercial radio licence to promote, or assist the promotion of, his sponsors or their products or services. The fact that, on some occasions, a caller mentioned the sponsor’s name did not derogate from this consequence. Rather it appeared to have been part of Mr Laws’ program to engage in discussion about his sponsors, their products and services. Listeners to commercial radio licensees’ programs may not able to know how it came to be that a caller mentions one of a presenter’s sponsor’s name, product or service. The caller could be an agent of the sponsor or the presenter, for all the listening audience would know.
127 But, I have no doubt that Mr Laws knew the names, products and services of his sponsors and that, if one of these was mentioned by him, a guest or caller on his show, he had an obligation to make a disclosure statement at the time of that mention. He knew that this was a condition of Radio 2UE’s licence and that the Act required Radio 2UE and himself to comply with the disclosure standard.
128 Mr Laws was Radio 2UE’s “star”, its means of earning substantial advertising revenue by attracting listeners to his show. The fact that he could earn substantial sums himself, from sponsors under commercial agreements, demonstrated just how valuable he was to the enterprise of Radio 2UE. His conduct in using the licence was a central element of each of the 13 contraventions. That unlawful conduct is not addressed in an appropriate way by the agreed penalty.
129 One reason that the Parliament enacted the civil penalty and enforceable undertaking provisions in the 2006 amendments was to overcome the difficulty in enforcing criminal sanctions under the Act in respect of previous contraventions of the disclosure standard specifically by Mr Laws. And that standard itself had been made, in part, as a result of his yet earlier conduct. The parties’ submissions treated Mr Laws’ conduct as of relatively lesser importance in fixing a penalty than the other factors they addressed. I consider that Mr Laws’ conduct and his role in the contraventions are fundamental to the fixing of a penalty.
130 Radio 2UE complied largely with the form of the enforceable undertaking, but not with its substance. Neither Mr Mott nor Mr Ruhfus read any of the independent reviewer’s reports for the periods during which the 13 breaches of the disclosure standard the subject of these proceedings occurred. The reports were sent by email to the Authority, Mr Mott and Mr Ruhfus and I infer, since they were received by the three recipients, at the same time. These reports identified a number of failures by Radio 2UE, through Mr Laws, to broadcast disclosure announcements. The format of each report consisted of a short two page summary, identifying the 4 days monitored, statements as to the degree of compliance by Mr Laws with his disclosure obligations in live reads of advertisements, the incidental mention of his sponsors or their products and the reviewer’s conclusion of any failure to disclosure.
131 For example, in the report dealing with the 4 days she monitored in the 14 days ending 26 October 2007, the independent reviewer noted each of the five contraventions on 18 and 24 October 2007. The reviewer provided that report on 29 October 2007. The reviewer’s next report for the period ended 9 November 2007 identified the contravention on 2 November 2007. That was the last contravention before 30 November 2007.
132 Mr Mott did not recall receiving the independent reviewer’s reports but accepted that he must have received the emails forwarding them to the Authority, Mr Rufhus and him. Mr Mott’s usual practice was to review all emails sent to him and he was surprised by his failure to do so in respect of these reports. However, Mr Mott was sure that he did not read those reports in 2007 and that Mr Ruhfus did not bring them or their contents to his attention. Mr Mott considered that his heavy work load at the time was the likely reason for his not having read the reviewer’s reports. Mr Ruhfus did not give evidence.
133 Mr Mott was the most senior of Southern Cross Broadcasting’s employees who were to transfer to the Fairfax Radio Network as part of the latter’s acquisition. Mr Mott said that he had a heavy involvement in the transaction as the time for completion approached. He was involved in a number of meetings and was away from his Melbourne office for extended periods of time. I am satisfied that he was very busy during this period. He received many emails in respect of the transaction and, on completion on 9 November 2007, he changed his email address, so that after then he had to access two different addresses for his work related emails.
134 Radio 2UE relied on these pressures on Mr Mott during October and November 2007 as explaining his failure to read any emails from the independent reviewer appointed under the enforceable undertaking that drew attention to Mr Laws’ breaches of the disclosure standard in that period.
135 Mr Mott accepted, he said with the benefit of hindsight, that he and Mr Ruhfus ought to have focussed on the content of the independent reviewer’s reports and taken action in respect of the non-disclosures they revealed. He said that action should have included raising those matters directly with Mr Laws. Mr Mott said that Radio 2UE’s administration system at that time was not effective for those and the following 6 reasons:
(1) the internal monitor employed by Radio 2UE may not have been comprehensively trained before beginning work on 1 October 2007;
(2) “management at Radio 2UE did not have time to properly consider how to comply with the other requirements of the Enforceable Undertaking, namely to cause a disclosure announcement to be broadcast as soon as possible after the omission and to notify [the Authority] within 72 hours of these occurring”;
(3) Radio 2UE should have appointed a person to review the recorded broadcasts after the live to air program;
(4) the time lag that occurs between introducing a new compliance measure and when improvements are noticed after staff learn their role and gain competence;
(5) the internal monitor had to listen to Mr Laws’ program with great intensity for 3 hours a day. Mr Mott had only learnt after Mr Laws retired that the internal monitor had suggested to the independent reviewer having more than one monitor so that they could alternate;
(6) Radio 2UE should have retained a more senior person, with more experience of the requirements of the disclosure standard to deal with Mr Laws.
136 Mr Mott also reflected on other reasons why the 13 breaches occurred in late 2007. He said that Mr Laws’ 6 commercial agreements were the most any on-air presenter had. Mr Mott speculated that the significant number of sponsors and the number of products each of them had “would have made it very difficult for Mr Laws to make the disclosure announcement each and every time the sponsor [or] their products were mentioned”. Mr Laws had explained his earlier breaches as an oversight. Mr Mott said that owing to the nature of live radio, once an oversight occurs, it will only be rectified if it is noticed and someone causes Mr Laws to make a disclosure statement. Mr Mott said that Mr Laws’ attitude to complying with the disclosure standard was “… at certain times negative and this made it difficult for staff of [Radio 2UE] to ensure that he consistently complied with …” that standard.
137 Mr Mott said that on a number of occasions between 1 October 2007 and 30 November 2007 he enquired of Murray Olds, the executive producer of Mr Laws’ program, whether the new system was working and that Mr Olds told him that the internal monitor had prompted both Mr Laws and Mr Olds of the need to make disclosure announcements. Mr Mott said that this led him to believe that Mr Laws was fully complying and that the new administration system for the enforceable undertaking was also working.
CONSIDERATION OF THE EXPLANATIONS BY MR MOTT
138 Mr Mott’s explanations for Radio 2UE’s 13 contraventions were insubstantial. Mr Mott only learnt of the 13 contraventions in late February 2008. If Mr Mott or Mr Ruhfus had read the independent reviewer’s reports when received, as they should have, the deficiencies in the internal systems would have been apparent to them. The internal monitor was trained in part before 1 October and he was retrained by Mr Olding on 4 October 2007, the day before the first two contraventions. Moreover, the internal monitor was not the only person who had responsibilities.
139 Mr Laws had the primary responsibility. It was part of his job. He disliked the obligation, as the independent reviewer’s description of his “rant” on 24 October and his behaviour on 30 November 2007 showed. Mr Olds and the other production staff for the program must also have been well aware of the disclosure standard and Mr Laws’ commercial agreements with his sponsors. Mr Mott said that he and Mr Olding had given additional training to Mr Laws, Mr Ruhfus and the production staff as recently as 28 August 2007. Each of those persons had an hour’s training and they received copies of Radio 2UE’s printed booklet setting out its compliance policy and the relevant requirements of the Act and standards with which they had to comply.
140 I do not accept that any of the 13 contraventions arose because Mr Laws overlooked that he or a caller had mentioned a sponsor or one of its products of services. First, there was no evidence from him that he did “overlook” any of those mentions or his duty to make a disclosure announcement. Secondly, he was paid a large amount by each sponsor and it was his responsibility to be aware of the consequence of mentioning their names, products or services. He controlled the content of his program and encouraged his callers to mention his sponsors, their products and services.
141 I infer that one significant reason for the 13 contraventions was identified by Mr Mott in his last reason; namely that Mr Laws resented having to make disclosure announcements and he made it hard for the staff to remind him of the need to make one when he had omitted to do so. But this attitude and the problems that it had caused Radio 2UE over the past years was known to senior management of Radio 2UE including Mr Mott. Radio 2UE chose to take the risk of breaching the law through the faith it placed in, and lack of appropriate steps to control the on-air conduct of, its presenter, Mr Laws, knowing of his earlier failings.
142 I reject the argument that Mr Laws’ failures were “careless”. His failures to disclose were made by a professional presenter being paid over $400,000 p.a. by these sponsors to mention their names, products and services. He was well aware of the disclosure standard. I am not prepared to accept his failures as “careless” or “oversights” in the absence of evidence from Mr Laws.
143 At least a portion of Mr Laws’ programs on each of the relevant days involved discussions with his callers about his sponsors or their products or services. In other words, the mention of the sponsors, their products or services was an integral part of Mr Laws’ program. This may explain why the sponsors (other than Byron Bay Beveridges) were prepared to pay in excess of $100,000 each for Mr Laws to promote them. They may have received value for their money. But the relevant price for that was the duty of Radio 2UE to see that Mr Laws complied with the Act, the licence and his contract. His assertions that this duty created an “… environment of total terror” and that his obligation to comply with the law was “in order to appease the Nazis and also to appease the terrified management of this broadcasting station” demonstrated a disturbing disregard for his obligations, and the privilege that his use of Radio 2UE’s license gave him.
144 Mr Laws was a professional presenter. But, he was a recidivist with respect to complying with the standard. His statement, when he made his announcement on 29 October 2007, that “maybe we didn’t mention” the name of the sponsor on the previous occasion is not evidence I would accept of any carelessness. The terms of Mr Laws’ purported disclosure announcement made on 29 October 2007 should have raised concerns for the management at Radio 2UE about, first, his continuing resentment of having to comply with the disclosure standard and, secondly, whether the monitoring system would be effective. There was no evidence to explain the circumstances in which the announcement of 29 October 2007 came to be made (other than the inference that Mr Ruhfus, having sent the letter to the Authority, asked Mr Laws to make it) or, what, if anything, was done after it to ensure compliance by Mr Laws.
145 And, contravention 13 was not careless; it was a deliberate contravention made with the intention of bringing the disclosure standard into contempt.
146 Radio 2UE committed the contraventions because it allowed Mr Laws to present his program and to make the statements that he did without any proper control to stop him. When he was broadcasting, Mr Laws was Radio 2UE for the purpose of the disclosure standard.
AGREED PENALTY
147 I accept that Radio 2UE (either directly or through its holding companies), albeit after the event, demonstrated a responsible attitude. Radio 2UE has given substantial attention to developing effective compliance programs since the contraventions and both it and the Authority consider that these will be effective in reducing the risk of future contraventions of the disclosure standard.
148 While Radio 2UE is entitled have the penalties mitigated because of its responses to the contraventions and its good faith in its ineffective attempts to comply with the disclosure standard, it cannot relieve itself of the gravity of its contravening conduct (being the conduct of its presenter, Mr Laws). It may have its own remedies in contract for damages against Mr Laws for his breaches. Had Radio 2UE told Mr Laws that it would seek to hold him liable for damages for breach of contract in the event that it incurred costs of any investigations into a contravention by him of the disclosure standard and the amount of any pecuniary penalty imposed, it is likely that he would have been far more concerned to comply with the law.
149 At common law the fact that an accused person has pleaded guilty is a matter properly to be taken into account in mitigation of his or her sentence in a criminal proceeding. That is because it is usually evidence of some remorse on the part of the offender, and secondly, an acceptance of responsibility. It may also indicate a willingness to facilitate the course of justice: see Cameron v The Queen (2002) 209 CLR 339 at 343 [11]-[14] per Gaudron, Gummow and Callinan JJ.
150 In Mornington Inn Pty Ltd v Jordan (2008)168 FCR 383 at 404-405 [73]-[76], Stone and Buchanan JJ considered the applicability to civil penalty proceedings of the common law principle of affording a discount to a sentence imposed after a plea of guilty. Stone and Buchanan JJ concluded that the rationale for providing a discount for an early plea of guilty in a criminal case did not apply neatly to a case where a civil penalty is sought and the case proceeded on pleadings. They said, that nonetheless, it should be accepted for the same reasons as given in Cameron 209 CLR 339, that a discount should not be available simply because a respondent has spared the community the cost of a contested trial. They held that the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability, first had indicated an acceptance of wrongdoing and a suitable and credible expression of regret, and or secondly, had indicated a willingness to facilitate the course of justice: Mornington Inn 168 FCR at 405 [76].
151 I am satisfied by Mr Mott’s evidence and the Authority’s acceptance of the measures that Radio 2UE now has in place that those measures provide a better means of ensuring compliance by presenters with the disclosure standard. It is not necessary to give the detail of the measures here. Radio 2UE has learnt from its experience of Mr Laws’ breaches. In addition, he has retired and Radio 2UE now has inserted into its contracts with presenters a right to suspend a presenter immediately if it reasonably believes that he or she may be in breach of the contract. On behalf of Radio 2UE, Mr Mott expressed deep regret for the occurrence of all 13 breaches. I accept that evidence.
152 I am satisfied that Radio 2UE has genuinely accepted its wrongdoing in its contravening conduct and, through Mr Mott and its co-operation in the conduct of the earlier investigations and in these proceedings, it has made a genuine expression of its regret. Radio 2UE also indicated a willingness to facilitate the course of justice by this commendable conduct. These factors warrant some reduction in the penalty that would otherwise be appropriate.
153 Radio 2UE also submitted in reply:
“Further, the widespread public knowledge of Mr Laws’ conduct and views about the disclosure standard and related public criticism of that conduct prior to October 2007 as referred to by [the Centre] together with the context of each contravention, mean the [Centre’s] concerns about the ‘undermining of public discourse’ and its ‘corrosive effect on public debate’, and the ‘distortion of the market’ have to be tempered.”
154 I reject that submission. The fact that the 13 contraventions occurred given the history of Radio 2UE’s previous failures to comply, because of its presenter’s, Mr Laws’, conduct and views, adds to the seriousness of these contraventions. Licensees must be on notice that such violations of the public trust will attract substantial penalties, even in the enforcement tier into which the civil penalty proceedings fall under the Act.
155 One of the primary purposes of imposing a penalty is to penalise the wrongdoer for its contravention of the law. The amount of that penalty must be in a sum that is appropriate in all the circumstances. There will be occasions where one person contravenes the law in circumstances where one penalty might be appropriate, but if a different person commits the same breach the same circumstances might dictate that a substantively different penalty would be appropriate. This is commonplace in explaining why a first offender may receive a lesser penalty than a person who has a substantial record of offending. The element of deterrence may be but one of the considerations relevant under the applicable statutory scheme which a person imposing a penalty or sentence must take into account in arriving at a sanction which is appropriate in all the circumstances.
156 The position of public trust and the damage which can be done to the integrity of broadcasting by breaches of the disclosure standard mean that these contraventions, generally, must be seen to be within a higher scale than that chosen by the parties. This is not a case of a licensee with no prior history of the kind which Radio 2UE had in relation to Mr Laws as the references to that history in the agreed facts accepted. Radio 2UE was in the position it was, after giving the enforceable undertaking, because of its earlier failures to implement a proper system for compliance on Mr Laws’ program with the disclosure standard. And, cl 13 of the disclosure standard obliged Radio 2UE to require Mr Laws to comply with it. Radio 2UE has only itself to blame for its failure to do so.
157 I am of opinion that, overall, the 13 contraventions could not properly be characterised, in the way the parties argued, as towards the lower end of the range. Some, however, were at the lower end. Mr Laws used Radio 2UE’s licence to promote his sponsors for his significant financial benefit without complying with the disclosure standard. That standard clearly irritated him. Radio 2UE was aware of his dissatisfaction with having to obey the law in earning his considerable income from his commercial agreements. It had given an enforceable undertaking that put in place a new compliance system. That system, through the independent reviewer, actually identified the first contraventions on 5 October 2007. But, as I have found, Radio 2UE ignored its obligations under the enforceable undertaking and none of its officers bothered to read the independent reviewer’s report. Mr Mott explained (and I accept) that, in his case, this was due to pressure of work and oversight. But there was no evidence from Mr Ruhfus why he did not read these or if he had what he did in response or why no-one else had that simple reading task delegated to them. The contraventions were obvious as soon as the short, lucid report was opened. Mr Laws’ contraventions, and hence Radio 2UE’s, continued thereafter.
158 A commercial radio broadcasting licensee must appreciate that it is responsible for its presenter’s breaches of the Act and its licence. It must take real, and not perfunctory steps, as Radio 2UE did in October and November 2007, to ensure its compliance with the Act and licence. Unless this realisation is promoted there is a real risk of further contraventions of the disclosure standard by Radio 2UE and other licensees. A pecuniary penalty of $10,000 for each of the 13 contraventions for these serious breaches by the presenter who was a stimulus, first, for the introduction of the disclosure standard and, then, the 2006 amendments is manifestly inadequate. I am of opinion that, in general, the individual penalties of $10,000 are, and the total for the 13 contraventions of $130,000, is as a whole unreasonable and plainly unjust. Thirteen accidental slips over a two month period by a presenter with an unblemished record, depending on the circumstances, may attract pecuniary penalties at the lower end of the scale. But Radio 2UE cannot be seen to get such benign, indeed ineffectual, treatment for Mr Laws acting as Radio 2UE when breaching the disclosure standard in the present circumstances. Radio 2UE cannot be allowed to rely on its inability to ensure that its presenter, Mr Laws, with his history, scrupulously adhered to the conditions of its licence and obeyed the law.
159 Overall, the contraventions in this case are of a serious nature. They indicate that there was a significant failure of Radio 2UE to take proper and sufficient steps to ensure that Mr Laws, in fact, complied and continued to comply with the disclosure standard. Not only did the Act and its licence require it to ensure that Mr Laws complied with the disclosure standard; as a result of Mr Laws’ last serious contraventions it had just given an enforceable undertaking that it would bring this about directly. The obligations imposed on Radio 2UE as conditions of its public broadcasting licence were to protect the public. Mr Laws earned substantial amounts of money for himself through his commercial agreements using its licence. That made it all the more incumbent on Radio 2UE to ensure that Mr Laws did not contravene the conditions of the licence again.
160 While I accept that both the Authority and Radio 2UE have approached the matter with good faith and in an attempt to serve what they perceive to be the public interest, I am of opinion that they have not adequately focused on the significant violations of the public trust placed in Radio 2UE which it breached through allowing Mr Laws’ misbehaviour. The 13 instances were not isolated contraventions. They followed from a history. The Parliament enacted the 2006 amendments, containing the civil penalties and enforceable undertaking provisions, in order to be able to provide a mechanism to deter and stop conduct of the kind in which Mr Laws had previously engaged in misusing his and Radio 2UE’s privileged position under its licence.
161 The first two contraventions should fall into the range which the Authority and 2UE have selected. There is no evidence that Radio 2UE or Mr Laws had contravened the disclosure standard between August 2006 and 5 October 2007. The second contravention was more serious because of the earlier realisation, after the first, of the need to make a disclosure announcement, but overall the agreed penalties are within a range that make them appropriate.
162 Had the independent reviewer’s report for that period been read properly and promptly, it would have revealed to Mr Mott or Mr Rufhus, or others at Radio 2UE at that time, that Mr Laws had failed to comply with the disclosure standard twice on 5 October 2007. In addition, the internal monitor should have drawn attention to these contraventions. The Authority and, I infer, Mr Mott and Mr Ruhfus received the independent reviewer’s report on 18 October 2007, the date of the third and fourth contraventions. But there is no evidence of when on 18 October that report was received. It is not possible to find whether its receipt by Mr Mott and Mr Ruhfus on that day would have enabled Radio 2UE to take steps to prevent the third and fourth contraventions. Each was a clear, easily recognisable contravention. I am of opinion that each was serious.
163 The remaining 9 contraventions should have been prevented had Radio 2UE appreciated from the 18 October independent reviewer’s report that the new compliance system had not worked and it had once again breached the Act and the disclosure standard, as well as the enforceable undertaking. Given the stage which the acquisition had reached, the threat of Radio 2UE being found to be in breach of its licence and the enforceable undertaking also would have impelled immediate action by Mr Mott, if not his superiors in Southern Cross Broadcasting to ensure that Mr Laws complied with the disclosure standard in the future.
164 Contraventions 5, 6 and 7 all occurred on 24 October 2007. Contraventions 5 and 6 involved two different sponsors, Toyota and Byron Bay Beveridges that were referred to in one talk back conversation between Mr Laws and a listener. There was no extenuating circumstance for either contravention. Mr Laws appeared to have considered that he could devise his own rules for compliance with the disclosure standard by ringing a cow bell at the mention of a sponsor’s name. However, that could not satisfy the requirement of cl 7(3) to make a disclosure announcement using one of the six prescribed verbal formulas. The contraventions were clear, serious and inexcusable. These contraventions were at a higher level than the lower end of the range, even after allowing for all the mitigating factors relied on by the parties.
165 In addition, contravention 7 involved three mentions of Hamilton Island in the one conversation with another talk back caller without any disclosure announcement. Again, I am unable to see any extenuating circumstance that suggests that this was not a serious contravention. Its seriousness was compounded two days later in contravention 8 when this segment was replayed, without any disclosure announcement, as a highlight of Mr Laws’ programs during the preceding week. In my opinion contravention 8 was a very serious contravention because Radio 2UE used a recording. Thus, it was not a case of a spontaneous on-air error. Anyone connected to Mr Laws’ program who selected this segment for repetition, must have known that Hamilton Island was a sponsor and there was no disclosure announcement for any of its 3 mentions. Thus, the republication of contravention 7 in contravention 8 was reckless conduct by Radio 2UE.
166 Contravention 9 involved another use by Mr Laws or Radio 2UE of the cow bell as a substitute for compliance with cl 7(3) of the disclosure standard. By this time, Mr Laws had committed 8 previous contraventions. The use of the cow bell did not satisfy in any way the obligation to make a disclosure announcement. There were no extenuating circumstances to reduce this serious breach to the lower end of the range.
167 Contraventions 10, 12 and 13 all occurred on Mr Laws’ last day as a presenter. Contravention 10 was not as clear cut as the others, however, Radio 2UE accepted that it had been made out by Mr Laws mentioning the names of the two majority shareholders in his sponsor, Roche Group Pty Limited. This connection was between Mr and Mrs Roche and their companies’ products or services was not as blatant or obvious as the other contraventions involving the use of well known brand names. I consider that this contravention is one that can reasonably be seen as falling within the range of the agreed penalty, notwithstanding that it was the tenth breach of the disclosure standard.
168 Contraventions 11 and 12, however, were both egregious. Callers mentioned various sponsors. Mr Laws and Radio 2UE made no attempt to comply with the requirement to make appropriate disclosure announcements. These failures had no extenuating circumstances and, in my opinion, were each a serious contravention. Indeed, contravention 12 involved the mention of 5 of Mr Laws’ sponsors.
169 Contravention 13 was a very serious, deliberate contravention. It expressly flouted the disclosure standard. I am comfortably satisfied that there was no justification or excusable circumstance for contravention 13. Nor do I regard the agreement to a penalty for it to constitute a significant mitigating circumstance. It was the fourth contravention on that day. It was blatant and a direct challenge to the Authority, the Act and the disclosure standard. The imposition of a penalty of $10,000 for contravention 13 would be seen by the community, with every justification, as a minor slap on the wrist for a deliberate flouting of the law. If a presenter can deliberately behave as Mr Laws did in contravention 13 and the commercial radio licensee receive a penalty at the lower end of the range, no-one will be deterred from committing substantial infractions of the law. That behaviour calls for a very substantial, if not the maximum, penalty.
THE TOTALITY PRINCIPLE
170 In arriving at the appropriate pecuniary penalties to be imposed for multiple contraventions, a court must first assess individual penalties for each contravention. But, before finalising the civil penalty orders the Court must look at and, if need be, adjust the resulting total effect of the individual orders it is considering, so as to produce an overall set of civil penalty orders appropriate to deal with all the contraventions. In other words, the totality principle applicable in passing criminal sentences should be adapted to apply to the overall civil penalty orders imposed on a contravenor: Mill v The Queen (1988) 166 CLR 59 at 62-63 per Wilson, Deane, Dawson, Toohey and Gaudron JJ, applied in a civil penalty context by Stone and Buchanan JJ in Mornington Inn (2008) 168 FCR at 408 [91]; see too at 397-398 [42]-[45]; see also per Gyles J who dissented in the result but not on the principle’s applicability at 386-387 [5]-[9]. Where contraventions are separate offences in law but are substantially contemporaneous and connected, the Court must have regard to the totality principle in fixing the individual penalties: L Vogel & Sons Pty Ltd v Anderson (1968) 120 CLR 158 at 168 per Taylor, Menzies and Owen JJ. The Court must also have regard to the relative closeness of the relationship in time and character of the offences (or contraventions): Mill 166 CLR at 64.
171 Some aspects of the totality principle are not as easily applied to pecuniary penalties as to sentences of imprisonment using the method preferred in Mill 166 CLR at 63. The High Court suggested its preference for making sentences wholly or partially concurrent, where practicable, to reflect the appropriate overall punishment in the ultimate total result rather than lowering individual sentences below what would otherwise be appropriate to reflect the fact that a number of sentences were being imposed: Mill 166 CLR at 63; RH McL v The Queen (2000) 203 CLR 452 at 457 [15]-[16], 462-464 [32]-[34] per Gleeson CJ, Gaudron and Callinan JJ, 476 [75] per McHugh, Gummow and Hayne JJ; see too Lukatela 223 FLR at 15-16 [75]-[77] where I discussed the principle. Concurrent pecuniary penalties cannot be imposed. So the Court must consider the overall burden imposed by the set of pecuniary penalties to assess whether, in totality, the burden is greater that is warranted by the contraventions in all of the circumstances: see too s 205F(3). In fixing the penalties below I have had regard to the totality principle as explained above.
FIXING THE PENALTIES
172 I am satisfied by the confidential evidence of Mr Mott that Radio 2UE is a substantial company in its own right and is capable of paying any penalty which the Court might impose. In addition, Radio 2UE has entered into a deed of cross guarantee with its ultimate holding company, Fairfax Media Limited, and thus has adequate resources with which to pay any penalty in the whole range and costs.
173 I have also had regard to the significant advertising revenues of Radio 2UE, disclosed in Mr Mott’s confidential evidence, in forming the view that Mr Laws must have been valuable to Radio 2UE. Mr Laws was obviously a presenter on whom Radio 2UE relied on to attract to attract audiences and advertising review. He had over 50 years exposure and experience of public broadcasting. I find that Mr Laws attracted a significant proportion of its total advertising revenue earnings, having regard to what he himself earned and Mr Mott’s evidence that he was the station’s presenter with the most commercial agreements. The Authority’s report in respect of the 13 contraventions identified Byron Bay Beer and Toyota Motor Corporation Australia Limited as advertisers on Radio 2UE as well as sponsors of Mr Laws. There was no evidence that the other sponsors, the subject of the contraventions also advertised on Radio 2UE.
174 The imposition of a civil penalty is, like the imposition of a sentence, a matter of instinctive synthesis. Here, there are no guides other than the subject matter, scope and purpose of the Act and the disclosure standard to use in ascertaining the object of imposing pecuniary penalties under s 205F. The public interest in ensuring that a commercial radio broadcasting licensee adheres to the conditions of their licence is of great importance. The repeated and substantial breaches by Radio 2UE as a licensee, should not be treated with a benign punishment. I am of opinion that having regard to the cumulatively damaging features of the repeated contraventions, civil penalties for most of them in a higher range than that chosen by the parties are the only ones which would appropriately meet the justice of the case.
175 Radio 2UE took no action at all on Mr Laws’ last day. The failure to institute a proper system earlier led to the continuing and serious breaches by Radio 2UE of the conditions of its licence. But, Mr Laws’ conduct itself was the central element of the contraventions. Any system is only as good as its weakest part. Mr Laws was a known recidivist. The independent reviewer detected his initial two breaches and reported them in time to enable preventative steps to be taken before 24 October 2007. Even then, Radio 2UE was aware of contraventions 7 and 8 by 26 October 2007 and reported them to the Authority. Yet there was no evidence of what steps it took then, after becoming aware that its internal monitor had failed to prevent, first, the initial contravention, let alone its republication, as had its training of Mr Laws and his production staff. And, Radio 2UE was aware, at least constructively, from the independent reviewer’s report of contraventions 5 and 6 involving Mr Laws’ “rant” and the inappropriate, seething resentment in his 29 October “disclosure” that, he treated the disclosure standard with contempt.
176 The pecuniary penalties must put a price on the contraventions that is sufficiently high to deter repetition by Radio 2UE as the contravenor and by others who might be tempted to contravene the Act and the disclosure standard: see CSR (1991) ATPR ¶41-076 at 52,152 per French J. I am of opinion that there will be a substantial deterrent effect given to licensees by the penalties I will impose. The kind of contraventions that Mr Laws caused Radio 2UE to make and its inadequate attention to the requirements of compliance must be deterred if the purpose of the disclosure standard is to be upheld.
177 I am satisfied that there will not be a repetition of Mr Laws’ conduct only because he has retired from presenting his program on Radio 2UE. Radio 2UE has not had to deal with or test whether Mr Laws would now comply under its new measures. However, I am also satisfied that Radio 2UE has implemented genuine and satisfactory changes to its compliance systems that are likely to lead to compliance by its other presenters. And, I am also satisfied that no bad faith was involved on the part of Radio 2UE’s management or Mr Mott.
178 Licensees must be deterred from taking lackadaisical attitudes to compliance with their statutory and licence obligations. Takeovers and changes of control in ownership occur on a fairly regular basis in the broadcasting industry. Such events are not an excuse for a licensee to fail to comply with the Act, the disclosure standard or its licence. If Mr Mott and all the senior management were too busy to protect the very basis which generated Radio 2UE’s entitlement to earn income, namely its licence, then a clear message must be sent by condign penalisation of that attitude. Such an attitude is unacceptable. It demonstrates an inattention to the public trust in commercial radio broadcasting licensees.
179 The privilege of being able to use the public radio spectrum cannot be allowed to be abused in the way that occurred here. The history and circumstances of the contraventions call for the Court to make clear how important licensees must regard the privilege which their licence gives them and the heavy responsibilities imposed by their licences if they are to continue to benefit by exploiting a public right. Under s 205F(3), I have had regard to all relevant matters, including, but not limited to the nature and extent of the contraventions, the mitigating factors put before me and particularly the circumstances in which they took place.
180 Because this is the first time in which a civil penalty has been considered in the context of the Act, I have given anxious consideration as to whether I should, despite my views, accept the submissions of the parties as to the appropriate range. For the reasons I have given, the considerations for imposing a civil penalty under the Act include but are not limited to those in the contexts of other legislation. The purposes for imposing civil penalties under legislation such as the Trade Practices Act are different. They involve contraventions of laws of general application by persons engaged in trade or commerce. Here, under the Act, the contraventions attracting liability to the imposition of a civil penalty involve the breach by a licensee of conditions of a licence granted by law to engage in activity for profit. The licensee is in a position of public trust.
181 I have taken into account the mitigating factors that Radio 2UE and the Authority have referred to in their submissions and evidence. I accept that Radio 2UE, since the contraventions came to light, has co-operated with the Authority and genuinely regrets its conduct. However, the penalty must punish the significant breaches of public trust that occurred. In addition, Radio 2UE did not ensure that the new system was working after it gave the enforceable undertaking. No explanation has been given why Mr Ruhfus did not learn of the contraventions (other than contraventions 7 and 8) or of what he did to satisfy himself, as general manager of Radio 2UE, that it was, through Mr Laws, complying with the Act, the disclosure standard and the enforceable undertaking. I have not punished Radio 2UE for breach of the enforceable undertaking. But its existence, the circumstances in which it was given and its proximity in time to the contraventions should have ensured that someone in Radio 2UE checked whether the new compliance system actually worked. It is an aggravating factor that no adequate steps were taken by Radio 2UE, even in that context, to check or ensure that the new system was working.
182 A licensee cannot assume that nothing will go wrong. Far less could Radio 2UE have assumed this with Mr Laws who, after all, had been the cause of giving the enforceable undertaking. Radio 2UE had a duty to be vigilant to ensure compliance with its licence, the disclosure standard and the Act. Instead, Radio 2UE committed the contraventions when it permitted Mr Laws to use its licence knowing that, first, Mr Laws had a history of previous contraventions of the disclosure standard (cp Weininger 212 CLR at 640 [32] per Gleeson CJ, McHugh, Gummow and Hayne JJ), secondly, he had an antipathy to the disclosure standard, thirdly, he had six very substantial commercial agreements and, fourthly, he made frequent references during his program to his sponsors, their products and services. But for Radio 2UE’s mitigating conduct, I would have imposed higher penalties for these serious breaches.
183 Rather than making declarations, I consider that it is appropriate to state each contravention and the pecuniary penalty I have imposed for it in the formal orders. The Authority, licensees and the public will be able to relate the two together in that way.
184 In my opinion, these contraventions should be marked with severe and substantial pecuniary penalties. The agreed penalties are, overall, but with the three exceptions I have noted, manifestly inadequate, indeed, negligible. To be sure, the Parliament intended that ss 140A and 205F would be a means of dealing with contraventions not calling for more severe sanctions such as suspension of a licence or its cancellation. The Chairman of the Authority aptly described the obligation to comply with the disclosure standard as going to the heart of a licensee’s obligations.
185 Having had regard to all relevant matters under s 205F(3) of the Act, I am of opinion that the following penalties should be imposed:
| Date | Contravention | Penalty
|
| 5 October 2007 | 1 | $ 10,000 |
| 5 October 2007 | 2 | $ 10,000 |
| 18 October 2007 | 3 | $ 20,000 |
| 18 October 2007 | 4 | $ 20,000 |
| 24 October 2007 | 5 | $ 25,000 |
| 24 October 2007 | 6 | $ 25,000 |
| 24 October 2007 | 7 | $ 30,000 |
| 26 October 2007 | 8 | $ 45,000 |
| 2 November 2007 | 9 | $ 35,000 |
| 30 November 2007 | 10 | $ 10,000 |
| 30 November 2007 | 11 | $ 35,000 |
| 30 November 2007 | 12 | $ 45,000 |
| 30 November 2007 | 13 | $ 50,000 |
|
Total |
|
$ 360,000 |
| I certify that the preceding one hundred and eighty-five (185) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. |
Associate:
Dated: 17 July 2009
| Counsel for the Applicant: | D Godwin |
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| Solicitor for the Applicant: | Australian Government Solicitor |
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| Counsel for the Respondent: | R A Dick |
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| Solicitor for the Respondent: | Holding Redlich |
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| Solicitor for the Intervenor: | Professor M Fraser |
| Dates of Hearing: | 20 February, 6, 20 March 2009 |
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| Date of Judgment: | 17 July 2009 |
SCHEDULE
Contravention 1: Friday 5 October 2007, approx 11.26am. No disclosure announcement was made that Hamilton Island Enterprises Ltd was a sponsor of Mr Laws at the time of an on-air mention of Hamilton Island.
Facts
Mr Laws was interviewing Meredith Whittle, the mother of a child who was assisted by the Starlight Foundation. Towards the end of the interview Mr Laws said:
“It’s a terrific thing that you have done, and the Starlight Foundation, and I’m glad that they supported you and you must let us know if we can help you in any way. I mean I’m here for a little while yet…have you been to Hamilton Island?.. Do you want to go to Hamilton Island?”
Mr Laws ended the interview without making a disclosure announcement and the interview was followed by a commercial for Hughes Clothing Company.
Directly after the commercial at 11:28, approximately 90 seconds after the mention, Mr Laws says: ‘I did tell you that Hamilton Island are sponsors of mine, didn’t I?
Contravention 2: Friday 5 October 2007, approx 11:40am. No disclosure announcement was made that Hamilton Island Enterprises Ltd was a sponsor of Mr Laws at the time of an on-air mention of Hamilton Island.
Facts
A caller, ‘Andrew’, referred to the interview forming part of contravention 1 and said:
“I’ve been listening for the last seven years…particular little stories and things like the thing you just did for that last lady, sending her off to Hamilton Island. You know, it’s what brightens your day up…you know, we’re going to miss that when you go, really miss that.”
Mr Laws replied: ‘I’ll miss doing it believe me’ and did not disclose the sponsorship. No disclosure announcements for this sponsor were made for the rest of the program.
Contravention 3: Thursday 18 October 2007, approx 10:06am. No disclosure announcement was made that Byron Bay Beverages Pty Ltd was a sponsor of Mr Laws at the time of an on-air mention of Byron Bay Beer.
Facts
Mr Laws read an email from a listener and said: ‘You also go on to say here, Des, I can’t find Byron Bay Beer anywhere in Central Victoria. Do they sell it in my state?’ Mr Laws commented on the email but there was no disclosure announcement regarding his sponsorship agreement with Byron Bay Beverages Pty Ltd.
Mr Laws had conducted a live-read commercial about Byron Bay Premium Ale at 9:59am, immediately before the 10am news and station advertisements.
Contravention 4: Thursday 18 October 2007, approx 10.28am. No disclosure announcement was made that Byron Bay Beverages Pty Ltd was a sponsor of Mr Laws at the time of an on-air mention of Byron Bay Beer.
Facts
Mr Laws was talking to a caller, ‘Mark’, who, after saying: ‘…we’re halfway through a fantastic, doing it really tough holiday on Hamilton Island’ then said: ‘I’m disappointed about the fact that I can’t find Byron Bay bitter in the fridge at the bottle shop down here’. Shortly after this statement Mr Laws said: ‘We’ll see what we can do. But enjoy Hamilton Island. As you know they are sponsors of mine…’ and very soon after concluded the call. Although Mr Laws made a disclosure announcement for Hamilton Island, there was no disclosure announcement for the Byron Bay Beverages Pty Ltd sponsorship during the conversation with Mark.
Prior to the conversation with Mark, Mr Laws had broadcast a live-read commercial for Byron Bay Premium Ale at 9:59am. The 10:28am conversation with Mark was followed by station advertisements, a 15-minute interview with singer James Blunt and station advertisements that finished at 10:50am. There was no disclosure announcement during this period for Byron Bay Beer.
Contravention 5: Wednesday 24 October 2007, approx 11:13am. No disclosure announcement was made that Toyota Motor Corporation Australian Ltd was a sponsor of Mr Laws at the time of an on-air mention of the Toyota Landcruiser.
Facts
Mr Laws spoke to a caller, ‘Greg’. During that call, Greg invited Mr Laws to his town in western New South Wales. Greg said.’…we’d like nothing better to, and I’m going to have to ask you to ring your RM Williams bell, to load up the Landcuriser with our esky and our snags…’ Mr Laws replied: ‘Good on you. Let me ring the bell’. A cow bell was sounded.
Mr Laws rang the cow bell after the mention of ‘Landcruiser’.
No disclosure announcement was broadcast for Toyota at that time or at any other time during the rest of the call. At 11.19am, Mr Laws conducted a 90 second live-read commercial for Toyota cars and the Warren Toyota Dealership.
Prior to contravention 5, Mr Laws had made an earlier disclosure announcement. He spoke to a caller, ‘Heath’, at 10.43am (about half-an-hour before the conversation with Greg). Heath mentioned his ‘new Hi-Lux’. Mr Laws then rang the cow bell and said: ‘They’re sponsors of mine, Toyota, as you know.’ Mr Laws did the same thing about 45 seconds later when he said: ‘….we got a Toyota watch there we’ll send Heath. Good lad, kept his belt buckle and kept on buying Toyotas [cow bell sounds] and you’re right, they’re sponsors of mine’.
Contravention 6: Wednesday 24 October 2007, approx 11.14am. No disclosure announcement was made that Byron Bay Beverages Pty Ltd was a sponsor of Mr Laws at the time of an on-air mention of Byron Bay Beer.
Facts
Mr Laws spoke to a caller, ‘Greg’ (continuing the conversation that led to contravention 5). During the call, Greg invited Mr Laws to his town in western New South Wales. Greg said: ‘And, as I said, if you’d like to bring some of your Wild Turkey or your Byron Bay beer and, or what have you’. Mr Laws replies ‘Got to ring the bell again’ and the sound of a cow bell is heard. Caller Greg said: ‘I’m sorry, I should have mentioned all those [sponsors] before we started…’
Ten minutes later in the program, at about 11.33am, Mr Laws made a disclosure announcement for the caller Greg and his mention of Byron Bay Beer by saying: ‘Did I say Byron Bay Beer are sponsors of mine? I’m sure I did. I say it in my sleep. Anyway, they’re sponsors Greg. I’ll send you a case. Get Greg’s address. I did say Qantas are sponsors of mine because I say it in my sleep’.
Contravention 7: Wednesday 24 October 2007, approx 10.10am. No disclosure announcement was made that Hamilton Island Enterprises Ltd was a sponsor of Mr Laws at the time of an on-air mention of Hamilton Island.
Facts
Mr Laws spoke to a caller, ‘Norman’. Norman said: ‘You go to Hamilton Island, you come back, then you go on holidays…’ Mr Laws replied: ‘That’s what really, really [expletive deleted] you off, that I go to Hamilton Island….Do you want to go to Hamilton Island, Norman?..’ Although Norman appeared to be an abusive caller, Mr Laws and Norman conversed for some time.
No disclosure announcement relating to Hamilton Island Enterprises was broadcast. Norman mentioned Hamilton Island again, but no disclosure announcement was made then or at the end of the call with Norman. No disclosure announcement was broadcast for Hamilton Island for the rest of that hour of the program.
On 26 October 2007 at 5:27pm Mr Ruhfus faxed a letter to the Authority reporting contraventions 7 and 8.
Contravention 8: Friday 26 October 2007, approx 11.51am. No disclosure announcement was made that Hamilton Island Enterprises was a sponsor of Mr Laws at the time of an on-air mention of Hamilton Island.
Facts
In a segment called “The Best of the Lawsy Week” the full conversation Mr Laws had with Norman on Wednesday 24 October (see contravention 7) was replayed. Radio 2UE did not cause a disclosure announcement to be broadcast following the replay.
Contravention 9: Friday 2 November 2007, approx 11.21am. No disclosure announcement was made that Toyota Motor Corporation Australia Ltd was a sponsor of Mr Laws at the time of an on-air mention of Toyota.
Facts
Mr Laws spoke to a caller, ‘Les’. Les identified himself as a long-time listener and said: I’m also a Toyota owner as well.’ Mr Laws replied: ‘Oh hang on [cow bell is sounded], I’ll ring the bell…Find something for Les, he’s a Toyota man, and a good one. And as I’ve said [implying a disclosure announcement] but…so I won’t say it again will I?’
About 14 minutes later Mr Laws was speaking to a caller, ‘Susuan’: said: ‘and you can ring the bell because I’ve just bought an Aurion ZR6 Sportivo [cow bell sounds] and I love it’. Mr Laws replied: ‘Isn’t it a great vehicle? I rang the bell because Toyota are sponsors of mine, I say with pride’.
A few seconds later, Mr Laws finished the call with Susan and, after arranging that she be sent a Toyota ladies watch, said: ‘….and I suppose after all that I better [cow bell sounds] tell you that they’re sponsors of mine.’ Those disclosure announcements did not relate to back to the conversation with Les concerning Toyota.
Contravention 10: Friday 30 November 2007, approx 9.53am. No disclosure announcement was made that the Roche family was a sponsor of Mr Laws at the time of an on-air mention that was directly favourable to the sponsor.
Facts
Mr Laws was reading a number of farewell emails, including: ‘…we send to you and Caroline our fondest love for many continuing, fulfilling and happy years, and trust that we will continue to meet in friendship in the years ahead.’ Mr Laws then said: ‘That’s Bill and Imelda – that’s the Roche family who are wonderfully kind, kind people….’ No disclosure announcement was made for the Roche sponsorship.
The Authority found that, as direct beneficiaries of the promotional services provided by Mr Laws under a commercial agreement with the Roche Group Pty Ltd (the Roche family are majority owners of the company), the Roche family was ‘sponsors’ within the meaning of cl 6 of the disclosure standard.
Contravention 11: Friday 30 November 2007, approx 10.21am. No disclosure announcement was made that Toyota Motor Corporation Australia Ltd was a sponsor of Mr Laws at the time of an on-air mention of Toyota Hi-Lux.
Facts
Mr Laws spoke to a caller, ‘Rebecca’. Rebecca said: ‘…I’m actually driving a Toyota Hi-Lux at the moment and just riding talking to all the farmers. Every single one of them has you playing on the radio at the moment.’ Mr Laws said: ‘Isn’t that nice? That’s very nice. How old are you, Rebecca?’
No disclosure announcement was broadcast during or at the end of the call. Mr Laws went onto another caller.
Contravention 12: Friday 30 November 2007, approx 11.14am. No disclosure announcement was made that Byron Bay Beverages Pty Ltd, Toyota Motor Corporation Australia Ltd, Qantas Airways Ltd and Oatley Family Wines were sponsors of Mr Laws at the time of an on-air mention of Byron Bay lager, Toyota, Qantas and Wild Oats Wine.
Facts
Mr Laws spoke to Channel ten weatherman Tim Bailey. Mr Bailey said:
“You have got your own personal chimpanzee-like weatherman. Any time you want a forecast to go to lunch, you’ve got one. Any time you might want to know it is right to be flying OS or are we going to take Caroline up the Hunter? Or put her on the boat? You ring me, you get a personalised forecast for free, Lawsy. Did I say for free? Well I mean we can work something out with some Wild Turkey, Byron Bay larger, maybe a Toyota, some Wild Oats, a Qantas flight, but I am your personal forecaster for free mate.”
Mr Laws replied: ‘It’s a pleasure, Tim. You’re a good fella. I’ll see you soon.’ Mr Laws did not make a disclosure announcement for any of the 5 sponsors mentioned by Mr Bailey.
Contravention 13: Friday 30 November 2007, approx 11.25am. No disclosure announcement was made that Toyota Motor Corporation Australia Ltd was a sponsor of Mr Laws at the time of an on-air mention of Toyota.
Facts
Mr Laws had just finished talking to the singer Normie Rowe who had mentioned Byron Bay Beer. Mr Laws said, ‘And of course I’ve got to say Byron Bay Beer are sponsors of mine’. Mr Laws went on to say:
“How bloody stupid. When are you people going to get over it? Never? What are you going to do next week when you don’t have to sit around and listen to me all day in case I say Toyota? [pause] Oh did you hear that? Did you hear that, Alice? He said Toyota! God! Boring old bastards! 13 13 32 is our telephone number. [pause] No, not our people here, the people at the….whatever you call it, what do you call it? ACMA. As I said yesterday, it sounds like a skin ailment.”
